The large-scale selling of sterling triggered fear and profited from the devaluation of sterling.

The British economy is declining day by day. The British government needs to devalue the pound to stimulate exports. However, the British government is restricted by the European exchange rate system and must barely maintain the exchange rate of the pound against the mark. The British government's high interest rate policy has been questioned by many financial experts, and domestic business leaders have also strongly called for lower interest rates. In the summer of 1992, although British Prime Minister John Major and the Chancellor of the Exchequer repeatedly reiterated on various public occasions that the current policy remained unchanged and that the United Kingdom had the ability to keep the pound within the European exchange rate system, Soros was convinced that the United Kingdom could not keep it within the European exchange rate system. As for its position in the European exchange rate system, the British government is just bluffing.

The pound-to-mark ratio continues to fall, from 2.95 to 2.85, and then from 2.85 to 2.7964. In order to prevent speculators from causing the pound-to-mark exchange rate to fall below the lower limit of 2.7780 stipulated in the European exchange rate system, the British government has ordered the Bank of England to purchase 3.3 billion pounds to intervene in the market. However, the government's intervention did not generate good expectations, which made Soros more convinced of his previous judgment, and he decided to attack when the crisis emerged.

In September 1992, speculators began to attack the weak currencies in the European exchange rate system, including the pound sterling, the Italian lira, etc. Soros and some mutual funds and multinational companies that have been engaged in arbitrage operations for a long time sold weak European currencies in the market, forcing the central banks of these countries to spend huge sums of money to support the value of their currencies.

The British government plans to borrow funds from international banking organizations to prevent the pound from continuing to depreciate, but this is a drop in the bucket. Soros alone spent $10 billion in this battle with the British government. In this gamble, Soros sold US$7 billion in pounds and purchased US$6 billion in a strong currency, the mark. At the same time, Soros considered that the depreciation (appreciation) of a country's currency usually leads to a rise in the country's stock market ( fell), bought another $500 million worth of British stocks and sold German stocks. If Soros was the only one competing against the UK, the British government might still have a glimmer of hope. However, the participation of many speculators around the world has resulted in a huge disparity in power between the two sides in this contest, dooming the British government to failure.

Soros is the biggest gambler in this "gamble". After placing the bet, Soros began to wait. In mid-September 1992, the crisis finally broke out. Rumors that the Italian lira was about to depreciate were circulating in the market, and there was a lot of lira selling. On September 13, the Italian lira depreciated by 7%. Although it was still within the floating range limited by the European exchange rate system, the situation looked very pessimistic. This gives Soros every reason to believe that some member states of the European Exchange Rate System will eventually not allow the European Exchange Rate System to determine the value of their own currencies, and these countries will exit the European Exchange Rate System.

On September 15, 1992, Soros decided to short the pound in large quantities. The pound-to-mark exchange rate fell all the way to 2.80. Although there was news that the Bank of England purchased 3 billion pounds, it still failed to stop the pound's decline. By the evening's close, the pound-to-mark exchange rate had almost fallen to the lower limit stipulated by the European exchange rate system. The pound is on the verge of exiting the European exchange rate system.

The British Chancellor of the Exchequer has taken various measures to deal with this crisis. First, he once again asked Germany to lower interest rates, but Germany once again refused; helplessly, he asked the Prime Minister to raise the country's interest rates by 2% to 12%, hoping to attract the return of currency through high interest rates. In one day, the Bank of England raised interest rates twice, reaching as high as 15%, but still had little effect. The exchange rate of the pound still failed to stand at the lowest limit of 2.778. In this action to defend the pound, the British government used foreign exchange reserves worth US$26.9 billion, but ultimately suffered a disastrous defeat and was forced to withdraw from the European exchange rate system. The British call September 15, 1992, the day they exited the European exchange rate system, Black Wednesday.

Soros was the biggest winner in the attack on the pound. He was once called by a magazine the man who defeated the Bank of England. Soros has made nearly $1 billion in profit from short trading on the British pound. His long positions on British, French and German interest rate futures and short trading on the Italian lira brought his total profits to as high as $2 billion, of which Soros’s personal income is 1/3. During the year, Soros's fund grew by 67.5%.