The Sterling Crisis: How they fought the battle of the pound: Chronology

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The Independent Online
6.45pm Tuesday: Robin Leigh- Pemberton, Governor of the Bank of England, and Ian Plenderleith, head of the bank's market operations, meet Norman Lamont and senior officials at the Treasury. They decide to engage in open support-buying of the pound on Wednesday morning and to raise interest rates if this does not work.

Overnight: Pound trades below its ERM floor of DM2.7780 in New York and Tokyo on reports that the Bundesbank wanted sterling to be devalued with the lira.

7am Wednesday: Swiss National Bank lowers Lombard rate. Swedish overnight rate raised to 75 per cent from 20 per cent.

8am Wednesday: Bank starts heavy support-buying of the pound, which trades at DM2.78.

8.30am: London stock market opens with dealers marking share prices sharply down. The FT-SE index of 100 leading shares opens 28.2 points down at 2,341.8.

9.00am: Bank of England continues support buying of the pound, which trades at DM2.7803.

9.30am: Stock market plunges; FT-SE index down 49.2.

10.30am: Bundesbank and French and Belgian central banks join in support-buying of sterling. Pound falls below DM2.78 and Bank begins mandatory buying of sterling at its floor of DM2.7780.

11.00am: Bank announces minimium lending rate (MLR) of 12 per cent, lifting base rates by 2 percentage points - the biggest jump in interest rates since 1985. Stock market falls sharply.

Noon: Bank announcement on money market dealing plans leads to speculation that another interest rise is planned.

2.17pm: Bank announces minimum lending rate of 15 per cent from today.

2.45pm: Stock market rallies spectacularly, virtually regaining losses of the day in the belief that the Government will be forced to devalue forcing interest rates to fall.

Overnight money market interest rates quoted at around 100 per cent reflecting intense speculation of a sterling devaluation.

4pm: Bank's defence of sterling's ERM parity ends for the day with the pound at DM2.7784. Dealers say pounds 10bn may have been spent supporting the pound, some 40 per cent of Britain's gold and foreign currency reserves.

4.30pm: Pound drops well below its ERM floor on speculation of devaluation, perhaps overnight. Stock market closes 8.3 points up on the day at 2,378.3

6pm: Pound trading below DM2.73.

7.38pm: Mr Lamont announces that sterling's membership of the ERM is suspended and the second rise in MLR cancelled.

7.36pm: In New York the pound slumps to DM2.70, nearly 8 pfennigs below its ERM floor.

10.00pm: Monetary committee of Council of European finance ministers meets in Brussels.