By Sept 1992, the pound (with several other currencies) was coming under pressure from foreign exchange speculators - trading at low level, close to min. allowable rate 2.77 marks.
Day started with wave of speculative selling. Gov. determined not to devalue and stay in ERM.
Chancellor, Lamont, increases interest rates - 10% -> 12% ->15% - hoped to persuade investors to buy pound again. B of E spent huge amounts buying pounds.
Pound continued to sink. Emergency meeting. Decide to withdraw - announced
Major disaster for party (pun not intended) - lost rep. for economic competence. Strengthened Eurosceptics and Labour opposition. Lost press support. Party divisions.
Although recovered well - less damaging than thought, maybe even beneficial.