The material on this site is for financial institutions, professional investors and their professional advisers. It is for information only. Please read our Terms & Conditions, Privacy Policy and Cookies before using this site.

All material subject to strictly enforced copyright laws. © 2020 Euromoney, a part of the Euromoney Institutional Investor PLC.

Jim Trott, Strategic and commercial manager for treasury services, Reuters

Author: Philip Eade


Jim Trott, who was chief dealer at the Bank of England in 1992 when Britain left the Exchange Rate Mechanism, has vivid memories of what came to be called Black Wednesday. "It was the sort of situation that if you'd known what was going to happen in advance, you'd have arranged to be on leave," he says. "But having gone through it, you wouldn't want to have missed out. It was an incredible position being between the government's objectives on the one hand and the markets on the other, with the government believing it could support the rate of Dm2.7780 to the pound."


The amount the British government spent trying to prop up the value of the pound has never been disclosed, although there have been plenty of estimates. Trott has signed the Officials Secrets Act and says the figure is something "I'll take with me to the grave".


In any event, he adds: "What happened afterwards in my view sowed the seeds for the success of the UK in the latter half of the decade. The devaluation of the pound to Dm2.17 turned out to be non-inflationary, which put us in a very competitive position for an export-led recovery.




You have reached premium content. Please log in to continue reading.

Read beyond the headlines with Euromoney

For over 50 years, our readers have looked to Euromoney to stay informed about the issues that matter in the international banking and financial markets. Find out more about our different levels of access below.

SUBSCRIBE ONLINE TODAY

Unlimited access to Euromoney.com and Asiamoney.com

Expert comment, long reads and in-depth analysis interviews with senior finance professionals

Access the results of our market-leading annual surveys across core financial services

Access the results of our annual awards, including the world-renowned Awards for Excellence

Your print copy of Euromoney magazine delivered monthly

£73.75 per month

Billed Annually

FREE 7 DAY TRIAL

Unlimited access to Euromoney.com and Asiamoney.com, including our top stories, long reads, expert analysis, and the results of our annual surveys and awards

Sign up to any of our newsletters, curated by our editors

LOGIN NOW

Already a user?

We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.
I agree