From the BBC website.
1992 UK Crashes out of ERM
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 the current markets. But the measures failed to prevent the pound falling lower than its minimum level in the ERM.
Second rise in the interest rate was reversed by the beleaguered chancellor soon after with drawl from the ERM, setting it at 12%.
The move is a dramatic U-turn in government policy, as only last week Prime Minister John Major reaffirmed the government’s commitment to remaining within the mechanism.
Mr Lamont admitted it had been an extremely difficult and turbulent day.
The Shadow Chancellor, Gordon Brown at the time said colossal errors of judgement by the prime minister and chancellor had betrayed the British people.
Liberal Democrat Leader Paddy Ashdown said the government’s policy had failed. “They have lost control of the economic situation, “he told the BBC.