What is the significance of Margaret Thatcher's entry into the Exchange Rate Mechanism in 1990?

Economic significance: The decision to enter ERM in 1990 was economically detrimental as this occured at a time when the £ was valued too highly compared to the Deutschmark, meaning the exchange rate could not be locked into place to hold down inflation. The result was the 'Black Wednesday' monetary crisis of 1992 which cost the government around £3.5 billion and a significant depletion of foreign exchange reserves.

Political significance: The decision highlighted the lack of cohesion in Thatcher's cabinet as she was advised by Chancellor Lawson to enter the ERM in 1985 however refused to do so. The crisis of 1992 worked to galvanise further Eurosceptism in the Conservative party, impeding John Major's plans to integrate Britain further with the EU, and arguably was one of the main events that tipped the scales for the 'leave' side in 2016.

HB
Answered by Hubert B. History tutor

2857 Views

See similar History A Level tutors

Related History A Level answers

All answers ▸

What is essential to an essay?


To what extent was the publication of the Balfour Declaration the greatest turning point in the Arab Israeli conflict, during the period between 1908 and 2011? (25 marks)


Why did Henry VIII come into conflict with the papacy in the early 1530s?


Why did the USA introduce marshal aid


We're here to help

contact us iconContact ustelephone icon+44 (0) 203 773 6020
Facebook logoInstagram logoLinkedIn logo

© MyTutorWeb Ltd 2013–2025

Terms & Conditions|Privacy Policy
Cookie Preferences