[Sometimes - Ed] 5 Erm, in House 6 Best.
Traders may try to break the peg, as happened when Britain was forced out of the ERM in 1992.
I had to Google Black Friday because I couldn't remember if it was the 1987 crash or when sterling plunged out of ERM in 1992.
Didn't he, erm, you know... Make $1.1bn in a single deal by short-selling sterling just before the Bank of England withdrew from the ERM in September 1992?
Sterling had joined the EU's longstanding Exchange Rate Mechanism (ERM) in 1990 but had struggled to remain inside its designated floating band.
By contrast, Mr King, who witnessed first hand Britain's humiliation when it was forced out of the ERM in 1992, is regarded as more of a sceptic.
The forced exit of the pound sterling from the ERM in 1992 ("Black Wednesday") cost British taxpayers £3.3 billion, mainly in lost appreciation of currency reserves.
Britain joined the European exchange-rate mechanism (ERM) in 1990 in the hope of importing some of Germany's inflation-busting success.But pegs have a number of problems.
The government had, at various times, tried to cut borrowing, restrict different measures of the money supply, shadowed the mark and joined the ERM in the hope of securing low and stable inflation.
The Conservatives were in power when Britain crashed out of the ERM in 1992, and it took the calamity of 2007 for them to be seen as better at managing the economy – a full 15 years later.
For a party haunted by previous devaluations—Harold Wilson railed against the "gnomes of Zurich"—this was a seal of approval to savour.Slung out of the ERM in 1992, sterling had sand kicked in its face until mid-1996.
