成人论坛

Kirsty Wark brings together bankers, traders and politicians to recall the events of Black Wednesday in 1992, when the collapse of sterling forced Britain鈥檚 exit from the European Exchange Rate Mechanism.

In 1990, the ERM was a central part of the then Chancellor John Major鈥檚 anti-inflationary policy, to 鈥減lace Britain at the heart of Europe鈥�. But as Prime Minister in 1992, he had to make the painful decision to pull out after a frenetic day in the City. Sterling was pegged to the deutsche mark and the idea was to use intervention on the exchanges to hold it within set bands on either side of a central rate. But a wave of short selling, led by the American hedge-fund manager George Soros, overwhelmed the ability of the Bank of England to support the pound.

Chancellor Norman Lamont raised interest rates from 10% to 12%, then to 15%, and authorised the spending of billions of pounds to buy up the sterling being frantically sold on the currency markets. But the measures failed to prevent the pound falling lower than its minimum level in the ERM.

Home Secretary Kenneth Clarke spent the day in crisis talks with the PM.

Sir Alex Allan was John Major鈥檚 principle private secretary.

Mark Clarke was the foreign exchange dealer at the Bank of America who sold half a billion pounds, making 拢10 million for his employers in eight hours of trading.

Jim Trott was the Bank of England鈥檚 chief currency dealer who bought more sterling in a day than anyone before or since.

Jeff Randall was the Sunday Times City Editor who watched the drama unfold.

Presenter: Kirsty Wark
Producer: Emily Williams
Series Producer: David Prest

A Whistledown production for 成人论坛 Radio 4

Show less