Will Today Become Britain's Black Friday? Stock Panic Through The Years
With market mayhem widespread on both sides of the pond following a referendum vote for Britain to leave the European Union (EU), the full extent of the carnage remains to be seen. The widespread hysteria and effect on the British pound solicits comparisons to Britain’s so-called “Black Wednesday,” when the pound was withdrawn from the European Exchange Rate Mechanism, a forerunner to the EU.
The “Brexit” vote prompted some to call Friday Britain’s “Black Friday.” For a little historical perspective, here’s a look at other “black” financial days from the past:
After the vote, the British pound plunged more than 10 percent initially, although it has recovered a bit since. George Soros, who made a fortune shorting the pound back in 1992 before Britain’s Black Wednesday, predicted a Brexit vote could cut the value of the pound by 20 percent.
Interestingly, Britain was able to combat the market turmoil after Black Wednesday by cutting interest rates, which took some pressure off businesses and individuals. That is a tool the Brits can’t very well put to use Friday, as rates officially stand at only 0.5 percent.
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