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Summary

After officially floating sterling, the Bank was still managing the pound behind the scenes. The Chancellor wanted sterling lower. The Bank therefore nudged the pound downwards with a surprise dollar purchase on 4 March 1976. This intervention was orders of magnitude from usual Bank operations. Private currency dealers got scared and started to follow the Bank and sell sterling. While the Government welcomed the fall at first, it quickly turned into a full-blown currency crisis. And just a few months later, the Government had to beg the IMF for money to prevent the pound collapsing.

Summary

1964 marked the election of Labour. It also marked the beginning of a long currency crisis that would culminate in the 1967 devaluation. The crisis was progressive. It showed American policymakers that a sterling crisis could very well lead to a gold crisis. This would threaten the international monetary system. The United States started to take the fate of sterling seriously.

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13 - The 1976 IMF Crisis

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9 - The 1964–1967 Currency Crisis

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13 - The 1976 IMF Crisis

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9 - The 1964–1967 Currency Crisis

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