In the latest edition of the Open Finance: Lessons From History series, Martin Upton explains what happened on Black Wednesday - and why, in retrospect, it might not have been all bad:

"From quite early on it became clear that the Bank of England was going to have to intervene quite regularly to keep the pound within its permitted range against the deutschmark within the ERM, and at times  - in terms of the foreign currency intervention which was required - this was costly. In addition, at the time, interest rates in Europe and even in Germany, which was dealing with reunification, were high, and that meant that UK interest rates had to be high because otherwise a differential between the interest rates in Germany and the rest of Europe and in the UK would have led to more pressure in terms of the value of the pound. There would have been downward pressure on the pound if the UK had cut interest rates at the time when European interest rates were high."

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In a brand new weekly podcast from The Open University Business School, our experts explore moments of major financial crisis in the past, and ask what we can learn from them.

In the first episode of Open Finance, Jane Frecknall-Hughes explains why we're still paying for the Napoleonic Wars through Income Taxes. Listen to programme one online.

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