Consequences Of The British Pound Attack 1992

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5. Consequence & impact of British Pound attack 1992
In 1992 the Quantum Fund played a major role on devaluing the Pound Sterling through speculation. The following section will present in detail the impact of the speculation during the “British Pound Attack”, focusing on the consequence which the British economy had to face and the enormous profits earned by the Quantum Fund.
First, the effects of the attack sterling in 1992 not only caused much damage to the British economy but also diminish Pound’s value and position in currency markets. The massive speculative action lead to a drastic devaluation of pound sterling. By September 15, the British pound depreciated over 2.25%. in the evening of September 16, 1992, Great Britain humbly announced
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So one of the positive consequences of this event is that Banks gained independence .The new monetary framework was introduced over the following months in order to improve the transparency of policy and set a considerable constraint on the freedom of man oeuvre of the Chancellor of the Exchequer. After the crisis, Britain was no longer dependent on the exchange rate previously specified and the pound gained a self-regulating mechanism of supply and demand. Lower interest rates encouraged exports, reduce imports leading to economic growth and ending the depression. The UK trade balance progressed by an annual average of 162 per cent in the next two years, followed by 96 per cent for the subsequent two years (Sebastian Mallaby, 2010). 'Black Wednesday' was sometimes recalled as a national disaster, however, some conservatives claim that the forced ejection from the ERM was a "Golden Wednesday" or "White Wednesday” - the day that paved the way for an economic revival. After the conservatives legislative they handed over a much stronger economy as in 1992 to Tony Blair's New Labor as new economic policies swiftly devised in the aftermath of Black Wednesday which led to re-establishment of economic growth, falling unemployment and inflation; the latter already begun falling before Black Wednesday (Sebastian Mallaby, More Money Than God, …show more content…
From here every action, gesture and words of George Soros was absorbed by the public, which later argued claimed that Soros was the worlds “number one financial trader”. People believed that he could make any currency devaluated or cause any economic crisis on will with few resources. Because of this reputation Soros was often accused as the culprit of economic crisis or financial uncertainty for countries where he went through or invested in. This believe was this strong that certain countries didn’t issue visas for him in order to avoid the disadvantages for their economy. Many people believed that Soros is a sinner for having "shot" the money to make a profit. Nevertheless, others acknowledge Soros as a legendary investor, who observed the economic states of many countries in order to make

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