The devaluation of the British pound in 1992 was due to ________ and hedge funds ________ the U.K. pound.

Question

Quizplus · Accepted Answer

The devaluation of the British pound in 1992 was due to higher inflation rates in Germany than in Britain, which caused investors to lose confidence in the pound. Hedge funds "shorted" the U.K. pound, which means they sold borrowed pounds with the expectation of buying them back later at a lower price and pocketing the difference.

The Devaluation of the British Pound in 1992 Was Due