LONDON (Reuters) - Investors fearing a no-deal Brexit have sold the pound at a pace drawing comparisons with currency crises that marked Britainís post-war history.
Vast sums of reserves squandered, political careers ruined and knocks to national pride all took a heavy toll on British governments that tried and failed to manage the exchange rate in the decades after World War Two.
These crises often involved attempts to hold the pound at a fixed rate against other currencies, something that is no longer an issue because it is free-floating.
But they demonstrate how even a slight miscommunication of policy can carry a heavy cost in times of economic strife.
The pound has tumbled below $1.21, not far from the 32-year lows hit in early 2017, and has lost more than 3% of its value against the U.S. currency in just over a week.
Below are examples of Britainís currency drama over the years.
BLACK WEDNESDAY, 1992
In a turning point of its membership in the European Union, Britain crashed out of the Exchange Rate Mechanism - a system designed to reduce currency fluctuations ahead of the launch of the euro - in September 1992.
This led to a sharp devaluation in the pound and, although the economy eventually prospered, it tarnished the Conservative Partyís reputation for economic management, culminating in Prime Minister John Majorís election defeat in 1997.
In a bid to prop up the pound, the government hiked interest rates to 15% and the Bank of England sold $40 billion worth of reserves in the months leading to Black Wednesday. In all, the cost to Britain was more than 3 billion pounds ($3.6 billion).
The pound began the 1980s worth $2.30, but by early 1985 it touched a record low of $1.05. Against a soaring U.S. currency swelled by global trade imbalances, parity with the dollar - once unthinkable - became a real possibility.
Although the government jacked up interest rates to prevent a further slide, some of the poundís decline was self-inflicted.
A briefing to the media in January 1985 from Prime Minister Margaret Thatcherís press secretary, intended to reassure financial markets, backfired badly.
ďMatters had not been helped by press reaction which confused the fact that the government had no specific target for the pound with total uncertainty about its level,Ē one minister complained, according to cabinet minutes published years later.
Eventually, the pound rose against the dollar after the worldís five leading industrial nations at the time struck the Plaza Accord in which they agreed that the U.S. dollar was overvalued and would take action to weaken it.
IMF CRISIS 1976
By the mid-1970s, Britainís economy was in dire straits. Attempts to stoke a boom early in the decade resulted in a severe bust a few years later, exacerbated by an oil crisis.
Inflation topped 25% in 1975 and the newly floating pound was in free-fall, eventually hitting a then-record low of $1.58 in October 1976.
A dismal set of government borrowing forecasts suggested Britain might no longer be able to pay its own way, forcing finance minister Denis Healey to seek outside help from the International Monetary Fund - a blow to Britainís prestige as a major economic force.
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