The currency was pegged to ECU and so government + central bank was purchasing pounds to maintain the exchange rate (the central bank was not free from governme

The currency was pegged to ECU and so government + central bank was purchasing pounds to maintain the exchange rate (the central bank was not free from government influence at the time.) To do that, they borrowed $15 billion to a war chest, which at the time was > 1% of UK GDP. It was not enough to maintain the exchange rate and one of the reasons for that was the gigantic short-sale of pounds by Soros and friends.