George Soros

"The man who broke the Bank of England"

In politics and economics, Black Wednesday refers to 16 September 1992 when the British Conservative government was forced to withdraw the pound sterling from the European Exchange Rate Mechanism (ERM) after it was unable to keep the pound above its agreed lower limit in the ERM. George Soros, the most high profile of the currency market investors, made over 1 billion GBP[1] profit by short selling sterling.

In 1997 the UK Treasury estimated the cost of Black Wednesday at £3.4 billion,[citation needed] with other sources giving estimates as high as £27 billion. In 2005 documents released under the Freedom of Information Act revealed that the actual cost may have been £3.3 billion.[2]

The trading losses in August and September were estimated at £800 million, but the main loss to taxpayers arose because the devaluation could have made them a profit. The papers show that if the government had maintained $24 billion foreign currency reserves and the pound had fallen by the same amount, the UK would have made a £2.4 billion profit on sterling's devaluation.[3][need quotation to verify] Newspapers also revealed that the Treasury spent £27 billion of reserves in propping up the pound.