The argument this series makes, in 9 steps. It is the same spine every module is built on, and no module states more of it than its own share.
Britain had kept the pound in the European exchange rate mechanism since October 1990; base rates had fallen from 15 to 10 per cent and inflation had come down.
In the Bank of England's account, inside the mechanism Britain in effect had to follow Germany's tight policy, which reunification had made tighter, while the British economy was weak.
After the Danish vote on 2 June, pressure built on the weaker ERM currencies before the French vote of 20 September; Britain borrowed foreign currency to defend the pound and the Prime Minister ruled out devaluation.
The lira was devalued on 13 September and German rates were cut slightly on 14 September; reports on the evening of 15 September of remarks by the Bundesbank President, later denied, preceded a further fall in sterling by 8 am on the 16th.
On 16 September the Bank bought pounds at the floor, the minimum lending rate was raised to 12 per cent and a second rise, to 15 per cent, was announced but never applied; that evening sterling's membership was suspended and the 15 per cent cancelled.
Out of the mechanism the pound fell to DM 2.61 on 18 September and DM 2.3709 on 5 October, 13 per cent below 16 September by year-end; a 1997 Treasury note put the loss at 3.3 billion pounds on its preferred assumptions.
Why the defence failed is argued. The central bank governors put diverging costs first, then German policy, piecemeal responses, the falling dollar and unprecedented capital movements; the Bank of England said Britain had in effect followed German policy and a defensive rise was not credible.
Outside the mechanism base rates were cut from 10 to 6 per cent by January 1993 and the Chancellor set a target range of 1 to 4 per cent for underlying inflation.
Underlying inflation stayed within the range to April 1997, before the general election, and unemployment fell from early 1993; in the recalled debate the Chancellor claimed the benefit of the first cut and his critics disputed it.