Can anyone remember the sequence of events which led to the crash in england in the early nineties, i know that lamont mishandled britains entry and exist from european exchange rate controls, but what was the exact catalyst, was it that the value of the pound was set too high within emu? i am unsure, and why was the pound so exposed when other big european currencies did not suffer the same fate, was the bank of england setting the interest rates then or were they being set by europe
Bank of England, early nineties, norma lamont
- Thread starter joe sod
- Start date
Correct me if I'm wrong, but I thought the catalyst was the continuing pressure mounted by speculators on Sterling? Because Sterling had a fixed rate in the ERM at the time, the BOE was obliged to soak up excess liquidity caused by speculators dumping the pound and prop up it's value. This pressure of this eventually became too great and so Britain pulled out of ERM and let the pound float freely. Then. iirc, Ireland had to soon follow suit as the punt was at one point worth 1.10 gbp. I'm not sure about why it didn't happen elsewhere.........I think maybe it did?
A summary of black wednesday on Wikipedia.