The Sterling Crisis: Politicians' words of wisdom on ERM

'People forget that there's nothing that you can do by joining the exchange rate mechanism to avoid fantastic fluctuations in currency . . .' Margaret Thatcher, 22 May 1989.

'Although it is no panacea, experience in recent years suggests that the exchange rate mechanism has helped participants both to bring about greater stability in exchange rates and to reduce inflation.'

John Major, Chancellor of the Exchequer, 31 October 1989.

'The discipline of the ERM is tough but, because it increases the certainty of lower inflation, it also means that when interest rate reductions do take place, they are securely based.'

Norman Lamont, Chancellor, 12 December 1990.

'The illusion that devaluation would enable us to make a substantial reduction in interest rates . . . is fool's gold.'

Mr Lamont, 31 December 1991.

'Britain joined the ERM . . . when Mr John Major was Chancellor of the Exchequer. Since then both interest rates and inflation have fallen rapidly.'

Conservative Campaign Guide, April 1992.

'As the current extraordinary pressures and uncertainties abate, I hope it will be possible to bring interest rates back down.'

Mr Lamont, 16 September 1992.