_ UNITED KINGDOM 9 British territories
British Antarctic Territory _
CENTRAL BANK Bank of England
* English (inc. Wales) notes:
Bank of England
* Scottish notes:
Bank of Scotland
* Bank of England
* Bank of Scotland
* Royal Bank of Scotland
* Clydesdale Bank
* Northern Bank
* First Trust Bank
* Ulster Bank
* Bank of Ireland
Isle of Man
MINT Royal Mint
INFLATION 1.8%, January 2017
SINCE 8 October 1990
WITHDRAWN 16 September 1992 ( Black Wednesday )
The POUND STERLING (symbol: £ ; ISO code : GBP ), commonly known as
the POUND, is the official currency of the
Crown dependencies of
Sterling is the fourth most-traded currency in the foreign exchange
market , after the
United States dollar
* 1 Names
* 2 Subdivisions and other units
* 2.1 Decimal coinage * 2.2 Pre-decimal
* 3 History
* 3.1 Anglo-Saxon
* 3.2 Medieval
* 3.3 Tudor
* 3.4 Unofficial gold standard
* 3.5 Establishment of modern currency
* 3.7 Use in the Empire
* 3.9 Bretton Woods
* 3.11 Free-floating pound
* 3.12 1976 sterling crisis
* 3.13 1979–89
* 3.14 Following the
* 3.15 Following the European
* 4 Coins
* 4.1 Pre-decimal coins * 4.2 Decimal coins
The full, official name, _pound sterling_ (plural : _pounds
sterling_), is used mainly in formal contexts and also when it is
necessary to distinguish the
There is apparent convergence of opinion regarding the origin of the term "pound sterling", toward its derivation from the name of a small Norman silver coin, and away from its association with Easterlings (Germanic traders) or other etymologies. Hence, the Oxford English Dictionary (and sources derived therefrom) state that the "most plausible" etymology is derivation from the Old English _steorra_ for "star" with the added diminutive suffix "-ling", to mean "little star" and to refer to a silver penny of the English Normans. As another established source notes, the compound expression was then derived:
silver coins known as "sterlings" were issued in the Saxon kingdoms, 240 of them being minted from a pound of silver... Hence, large payments came to be reckoned in "pounds of sterlings," a phrase later shortened... — _Encyclopædia Britannica_, entry "pound sterling"
However, the perceived narrow window of the issuance of this coin, and the fact that coin designs changed frequently in the period in question, led Philip Grierson to reject this in favour of a more complex theory.
Another argument that the Hanseatic League was the origin for both the origin of its definition and manufacture, and in its name is that the German name for the Baltic is "Ost See", or "East Sea", and from this the Baltic merchants were called "Osterlings", or "Easterlings". In 1260, Henry III granted them a charter of protection and land for their Kontor, the Steelyard of London, which by the 1340s was also called "Easterlings Hall", or Esterlingeshalle. Because the League's money was not frequently debased like that of England, English traders stipulated to be paid in pounds of the "Easterlings", which was contracted to "'sterling".
For further discussion of the etymology of "sterling", see sterling silver .
The currency sign for the pound is £, which is usually written with a single cross-bar (as on sterling bank notes), though a version with a double cross-bar (₤) is also sometimes seen. This symbol derives from medieval Latin documents; the Roman words _libra _, _solidus_, and _denarius_ ( £sd ) referred to pounds, shillings and pence in the British pre-decimal (duodecimal ) currency system and the black-letter "L" was the abbreviation for _libra_, the basic Roman unit of weight.
ISO 4217 currency code is GBP. Occasionally, the abbreviation
"UKP" is used but this is non-standard because the
ISO 3166 country
code for the
A common slang term for the pound sterling or pound is _quid_, which is singular and plural, except in the common phrase "Quids in!" The term may have come via Italian immigrants from "scudo ", the name for a number of coins used in Italy until the 19th century; or from Latin 'quid' via the common phrase _quid pro quo _, literally, "what for what," or, figuratively, "An equal exchange or substitution".
SUBDIVISIONS AND OTHER UNITS
Since decimalisation in 1971 (see Decimal Day ), the pound has been divided into 100 pence (until 1981 described on the coinage as "new pence"). The symbol for the penny is "p"; hence an amount such as 50p (£0.50) properly pronounced "fifty pence" is more colloquially, quite often, pronounced "fifty pee" /fɪfti: pi:/. This also helped to distinguish between new and old pence amounts during the changeover to the decimal system. A decimal halfpenny was issued until 1984, but was removed due to having a higher cost to manufacture than its face value.
Prior to decimalisation, the pound was divided into 20 shillings and each shilling into 12 pence , making 240 pence to the pound. The symbol for the shilling was "_s_."—not from the first letter of the word, but from the Latin _solidus _. The symbol for the penny was "_d_.", from the French _denier_, from the Latin _denarius _ (the solidus and denarius were Roman coins). A mixed sum of shillings and pence, such as 3 shillings and 6 pence, was written as "3/6" or "3_s_. 6_d_." and spoken as "three and six" or "three and sixpence" except for "1/1," "2/1" etc., which were spoken as "one and a penny", "two and a penny", etc.). 5 shillings, for example, was written as "5_s_." or, more commonly, "5/–". Various coin denominations had, and in some cases continue to have, special names—such as crown , farthing , sovereign and guinea . See Coins of the pound sterling and List of British coins and banknotes for details.
By the 1950s, coins of Kings George III , George IV and William IV had disappeared from circulation, but coins (at least the penny) bearing the head of any British king or queen from Queen Victoria onwards could be found in circulation. Silver coins were replaced by those in cupro-nickel in 1947, and by the 1960s the silver coins were rarely seen. Silver/cupro-nickel shillings (from any period after 1816) and florins (2 shillings) remained as legal tender after decimalisation (as 5p and 10p respectively) until 1993, but are now officially demonetised.
The pound sterling is the world's oldest currency still in use.
Main article: Anglo-Saxon pound A pound = 20 shillings = 240 silver pennies (formerly)
The _pound_ was a unit of account in Anglo-Saxon England, equal to 240 silver pennies and equivalent to one pound weight of silver. It evolved into the modern British currency , the pound sterling.
The origins of sterling lie in the reign of King Offa of Mercia
(757–796), who introduced the silver penny . It copied the
_denarius_ of the new currency system of
The early pennies were struck from fine silver (as pure as was
available). However, in 1158, a new coinage was introduced by King
Henry II (known as the _Tealby penny _) which was struck from 0.925
(92.5%) silver. This became the standard until the 20th century and is
today known as sterling silver , named after its association with the
During the time of Henry III , the pound sterling equalled the pound weight Tower. In the 28th year of Edward I (around 1300), the Tale Pound, or Pound Sterling, first began to differ from or come short of the Pound weight Tower, from which it originated and to which it had been equal until then, for by indenture of that year the pound weight was to contain 20s. 3d. in Tale. :14 In the 27th year of Edward III (around 1354), the pound sterling was now only 80% of the pound weight, or 9 oz 12 dwt (or 9.6 oz) Tower. :15 By an Act of 13 Henry IV (around 1412), the pound weight of standard silver was to contain thirty shillings in Tale, or one and a half pounds sterling; thus the pound sterling reduced to two-thirds of a pound weight, or 8 oz Tower. :18 The pound sterling was adjusted in weight several more times thereafter.
In the reign of Henry IV (1399–1413), the penny was reduced in weight to 15 grains (0.97 g) of silver, with a further reduction to 12 grains (0.78 g) in 1464.
During the reigns of Henry VIII and
Throughout this period, the size and value of the gold coinage fluctuated considerably.
UNOFFICIAL GOLD STANDARD
In 1663, a new gold coinage was introduced based on the 22 carat fine
guinea . Fixed in weight at 44 1⁄2 to the troy pound from 1670,
this coin's value varied considerably until 1717, when it was fixed at
21 shillings (21/-, 1.05 pounds). However, despite the efforts of Sir
Domestic offtake further reduced silver in circulation, as the improving fortunes of the merchant class led to increased demand for tablewares. Silversmiths had always regarded coinage as a source of raw material, already verified for fineness by the government. As a result, sterling coins were being melted and fashioned into sterling silverware at an accelerating rate. A 1697 Act of Parliament tried to stem this tide by raising the minimum acceptable fineness on wrought plate from sterling's 92.5% to a new Britannia silver standard of 95.83%. Silverware made purely from melted coins would be found wanting when the silversmith took his wares to the Assay Office , thus discouraging the melting of coins.
ESTABLISHMENT OF MODERN CURRENCY
CURRENCY OF GREAT BRITAIN (1707) AND THE UNITED KINGDOM (1801)
The pound Scots once had much the same value as the pound sterling, but it suffered far higher devaluation until in the 17th century it was pegged to sterling at a value of 12 pounds Scots = 1 pound sterling.
In 1707, the
Kingdom of England and the
Kingdom of Scotland
USE IN THE EMPIRE
Sterling circulated in much of the
The original English colonies on mainland North America were not
party to the sterling area because the above-mentioned silver shortage
During the American war of independence and the Napoleonic wars , Bank of England notes were legal tender , and their value floated relative to gold. The Bank also issued silver tokens to alleviate the shortage of silver coins. In 1816, the gold standard was adopted officially, with the silver standard reduced to 66 shillings (66/-, £3 6s), rendering silver coins a "token" issue (i.e. not containing their value in precious metal). In 1817, the sovereign was introduced, valued at 20 shillings. Struck in 22‑carat gold, it contained 113 grains (7.3 g) of gold and replaced the guinea as the standard British gold coin without changing the gold standard. In 1825, the Irish pound , which had been pegged to sterling since 1801 at a rate of 13 Irish pounds = 12 pounds sterling, was replaced, at the same rate, with sterling.
By the 19th century the pound sterling was widely accepted outside Britain. The American Nellie Bly carried Bank of England notes on her 1889–1890 trip around the world in 72 days . During the late 19th and early 20th centuries, many other countries adopted the gold standard. As a consequence, conversion rates between different currencies could be determined simply from the respective gold standards. The pound sterling was equal to 4.85 United States dollars, 5.25 Canadian dollars , 12.10 Dutch guilders , 26.28 French francs (or equivalent currencies in the Latin Monetary Union ), 20.43 German marks or 24.02 Austro-Hungarian krone . After the International Monetary Conference of 1867 in Paris, the possibility of the UK joining the Latin Monetary Union was discussed, and a Royal Commission on International Coinage examined the issues, resulting in a decision against joining monetary union.
The gold standard was suspended at the outbreak of the war in 1914,
Bank of England and Treasury notes becoming legal tender. Before
World War I
See also: Economic history of the UK, 1945–59
In 1940, an agreement with the US pegged the pound to the U.S. dollar
at a rate of £1 = $4.03. (Only the year before, it had been $4.86.)
This rate was maintained through the
Second World War
Operation Bernhard was the codename of a secret
In 1961, 1964 and 1966, the pound came under renewed pressure, as speculators were selling pounds for dollars. In summer 1966, with the value of the pound falling in the currency markets, exchange controls were tightened by the Wilson government. Among the measures, tourists were banned from taking more than £50 out of the country in travellers' cheques and remittances, plus £15 in cash; this restriction was not lifted until 1979. The pound was devalued by 14.3% to $2.40 on 18 November 1967.
Main article: Decimal Day
Until decimalisation, amounts were stated in pounds, shillings, and pence, with various widely understood notations. The same amount was denoted by 32s 6d, 32/6, £1 12s 6d, £1/12/6. It was customary to specify some prices (for example professional fees and auction prices for works of art) in guineas (one guinea was 21 shillings) although guinea coins were no longer in use.
Formal parliamentary proposals to decimalise sterling were first made in 1824 when Sir John Wrottesley, MP for Staffordshire, asked in the British House of Commons whether consideration had been given to decimalising the currency. Wrottesley raised the issue in the House of Commons again in 1833, and it was again raised by John Bowring , MP for Kilmarnock Burghs, in 1847 whose efforts led to the introduction in 1848 of what was in effect the first decimal coin in the United Kingdom, the florin, valued at one-tenth of a pound sterling. However, full decimalisation was resisted, although the florin coin, re-designated as _ten new pence_, survived the transfer to a full decimal system in 1971, with examples surviving in British coinage until 1993.
J. B. Smith, MP for Stirling Burghs , raised the issue of full
decimalisation again in Parliament in 1853, resulting in the
Chancellor of the Exchequer,
However the pound sterling was decimalised in various British
colonial territories before the
Towards the end of the Second World War, various attempts to
decimalise the pound sterling in the
With the breakdown of the Bretton Woods system , the pound floated from August 1971 onwards. At first it appreciated a little, rising to almost $2.65 in March 1972 from $2.42, the upper bound of the band in which it had been fixed. The sterling area effectively ended at this time, when the majority of its members also chose to float freely against the pound and the dollar.
1976 STERLING CRISIS
The Conservative Party was elected to office in 1979, on a programme of fiscal austerity. Initially the pound rocketed, moving above US$2.40, as interest rates rose in response to the monetarist policy of targeting money supply . The high exchange rate was widely blamed for the deep recession of 1981. Sterling fell sharply after 1980; at its lowest, the pound stood at just $1.03 in March 1985, before rising to $1.70 in December 1989.
FOLLOWING THE DEUTSCHE MARK
Following German re-unification in 1990, the reverse held true, as high borrowing costs to fund Eastern reconstruction, a need exacerbated by the political choice to make the Ostmark equivalent to the Deutsche Mark (DM), meant rates in other countries shadowing the DM, especially the UK, were far too high relative to domestic circumstances, leading to a housing decline and recession.
FOLLOWING THE EUROPEAN CURRENCY UNIT
On 8 October 1990 the Conservative government (Third Thatcher ministry ) decided to join the European Exchange Rate Mechanism (ERM), with the pound set at DM 2.95. However, the country was forced to withdraw from the system on " Black Wednesday " (16 September 1992) as Britain's economic performance made the exchange rate unsustainable. Speculator George Soros made approximately US$1 billion from shorting the pound.
'Black Wednesday' saw interest rates jump from 10% to 15% in an unsuccessful attempt to stop the pound from falling below the ERM limits. The exchange rate fell to DM2.20. Those who had argued for a lower GBP/DM exchange rate were vindicated as the cheaper pound encouraged exports and contributed to the economic prosperity of the 1990s.
FOLLOWING INFLATION TARGETS
In 1997, the newly elected Labour government handed over day-to-day control of interest rates to the Bank of England (a policy that had originally been advocated by the Liberal Democrats ). The Bank is now responsible for setting its base rate of interest so as to keep inflation (as measured by the Consumer Price Index (CPI)) very close to 2% per annum. Should CPI inflation be more than one percentage point above or below the target, the governor of the Bank of England is required to write an open letter to the Chancellor of the Exchequer explaining the reasons for this and the measures which will be taken to bring this measure of inflation back in line with the 2% target. On 17 April 2007, annual CPI inflation was reported at 3.1% (inflation of the Retail Prices Index was 4.8%). Accordingly, and for the first time, the Governor had to write publicly to the government explaining why inflation was more than one percentage point higher than its target.
As a member of the
On 1 January 2008, with the Republic of
The 2016 referendum which started the process of United Kingdom\'s
withdrawal from the
The government of former Prime Minister Tony Blair had pledged to hold a public referendum to decide on membership should "five economic tests " be met, to increase the likelihood that adoption of the euro would be in the national interest. In addition to these internal (national) criteria, the UK would have to meet the European Union's economic convergence criteria (Maastricht criteria) before being allowed to adopt the euro. The Conservative and Liberal Democrat coalition government (2010–2015) ruled out joining the euro for that parliamentary term. Currently, the UK's annual government deficit , as a percentage of the GDP , is above the defined threshold.
The idea of replacing the pound with the euro was always
controversial with the British public, partly because of the pound's
identity as a symbol of British sovereignty and because it would,
according to many critics, have led to suboptimal interest rates,
harming the British economy. In December 2008, the results of a BBC
poll of 1000 people suggested that 71% would vote no to the euro, 23%
would vote yes, while 6% said they were unsure. The pound did not
join the Second
European Exchange Rate Mechanism (ERM II) after the
euro was created.
Scottish Conservative Party claimed that there was an issue for
RECENT EXCHANGE RATES
Main article: Economy of the
United States dollar
3 Japanese yen JPY (¥) 21.6%
4 Pound sterling GBP (£) 12.8%
5 Australian dollar AUD (A$) 6.9%
6 Canadian dollar CAD (C$) 5.1%
7 Swiss franc CHF (Fr) 4.8%
9 Swedish krona SEK (kr) 2.2%
10 New Zealand dollar NZD (NZ$) 2.1%
11 Mexican peso MXN ($) 1.9%
12 Singapore dollar SGD (S$) 1.8%
13 Hong Kong dollar HKD (HK$) 1.7%
14 Norwegian krone NOK (kr) 1.7%
15 South Korean won KRW (₩) 1.7%
16 Turkish lira TRY (₺) 1.4%
17 Russian ruble RUB (₽) 1.1%
18 Indian rupee INR (₹) 1.1%
19 Brazilian real BRL (R$) 1.0%
20 South African rand ZAR (R) 1.0%
The pound and the euro fluctuate in value against one another, although there may be correlation between movements in their respective exchange rates with other currencies such as the US dollar. Inflation concerns in the UK led the Bank of England to raise interest rates in late 2006 and 2007. This caused the pound to appreciate against other major currencies and, with the US dollar depreciating at the same time, the pound hit a 15-year high against the US dollar on 18 April 2007, reaching US$2 the day before, for the first time since 1992. The pound and many other currencies continued to appreciate against the dollar; sterling hit a 26-year high of US$2.1161 on 7 November 2007 as the dollar fell worldwide. From mid-2003 to mid-2007, the pound/euro rate remained range-bound (within ± 5%) of €1.45.
Following the global financial crisis in late 2008, the pound depreciated sharply, reaching £1 per $1.38 (US) on 23 January 2009 and falling below €1.25 against the euro in April 2008. A further decline occurred during the remainder of 2008, most dramatically on 29 December when its euro rate hit an all-time low at €1.0219, while its US dollar rate depreciated. The pound appreciated in early 2009 reaching a peak against the euro in mid-July of €1.17. The following months the pound remained broadly steady against the euro, with the pound's current (27 May 2011) value at €1.15 and US$1.65.
On 5 March 2009, the Bank of England announced that it would pump £75 billion of new capital into the British economy , through a process known as quantitative easing . This was the first time in the United Kingdom's history that this measure had been used, although the Bank's Governor Mervyn King suggested it was not an experiment.
The process saw the Bank of England creating new money for itself, which it then used to purchase assets such as government bonds , secured commercial paper , or corporate bonds . The initial amount stated to be created through this method was £75 billion, although Chancellor of the Exchequer Alistair Darling had given permission for up to £150 billion to be created if necessary. It was expected that the process would occur over a period of three months with results only likely in the long term. By 5 November 2009, some £175 billion had been injected using quantitative easing and the effectiveness of the process remained less successful in the long term. In July 2012, the final increase in the asset purchases finance meant QE had peaked at £375 billion, then holding solely UK Government bonds, representing one third of the UK national debt.
The result of the 2016 UK referendum on EU membership caused a major decline in the pound against other world currencies as the future of international trade relationships and domestic political leadership became unclear. The referendum result weakened sterling against euro overnight by 5%. The night before the vote £1 was trading for €1.30; on the day following the referendum, when the result was clear, £1 was trading at €1.23. By October 2016, the exchange rate was €1.12 to the pound, a fall of 14% since the referendum. Against the US dollar, meanwhile, the pound fell from $1.466 to $1.3694 when the referendum result was first revealed, and down to $1.2232 by October 2016, a fall of 16%.
ANNUAL INFLATION RATE
The Bank of England had stated (2009) that the decision had been taken to prevent the rate of inflation falling below the 2% target rate. Mervyn King, the Governor of the Bank of England, also had suggested there were no other monetary options left as interest rates had already been cut to their lowest level ever (0.5%) and it was unlikely that they would be cut further.
The inflation rate per annum rose in following years, reaching 5.2% (based on Consumer Price Index) in September 2011, then decreased to around 2.5% in the following year.
Main article: Coins of the pound sterling
The silver penny (plural: _pence_; abbreviation: _d_) was the principal and often the only coin in circulation from the 8th century until the 13th century. Although some fractions of the penny were struck (see farthing and halfpenny ), it was more common to find pennies cut into halves and quarters to provide smaller change. Very few gold coins were struck, with the gold penny (worth 20 silver pence) a rare example. However, in 1279, the _groat _, worth 4d, was introduced, with the half groat following in 1344. 1344 also saw the establishment of a gold coinage with the introduction (after the failed gold florin ) of the _noble _ worth six shillings and eight pence (6/8) (i.e. 3 nobles to the pound), together with the half and quarter noble. Reforms in 1464 saw a reduction in value of the coinage in both silver and gold, with the noble renamed the _ryal_ and worth 10/- (i.e. 2 to the pound) and the _angel _ introduced at the noble's old value of 6/8.
The reign of Henry VII saw the introduction of two important coins:
the shilling (abbr.: _s_; known as the _testoon_) in 1487 and the
pound (known as the _sovereign _, abbr.: _£_ or _L_) in 1489. In
1526, several new denominations of gold coins were added, including
the _crown _ and _half crown _ worth five shillings (_5/-_), and two
shillings and six pence (_2/6_, _two and six_) respectively. Henry
VIII 's reign (1509–1547) saw a high level of debasement which
continued into the reign of
Following the succession of the Scottish King
James VI to the English
throne, a new gold coinage was introduced, including the _spur ryal _
(15/-), the _unite _ (20/-) and the _rose ryal_ (30/-). The _laurel _,
worth 20/-, followed in 1619. The first base metal coins were also
introduced: tin and copper farthings .
Following the restoration of the monarchy in 1660, the coinage was reformed, with the ending of production of hammered coins in 1662. The _guinea _ was introduced in 1663, soon followed by the 1⁄2, 2 and 5 guinea coins. The silver coinage consisted of denominations of 1d, 2d, 3d, 4d and 6d, 1/-, 2/6 and 5/-. Due to the widespread export of silver in the 18th century, the production of silver coins gradually came to a halt, with the half crown and crown not issued after the 1750s, the 6d and 1/- stopping production in the 1780s. In response, copper 1d and 2d coins and a gold 1⁄3 guinea (7/-) were introduced in 1797. The copper penny was the only one of these coins to survive long.
To alleviate the shortage of silver coins, between 1797 and 1804, the Bank of England counterstamped Spanish dollars (8 reales) and other Spanish and Spanish colonial coins for circulation. A small counterstamp of the King's head was used. Until 1800, these circulated at a rate of 4/9 for 8 reales. After 1800, a rate of 5/- for 8 reales was used. The Bank then issued silver tokens for 5/- (struck over Spanish dollars) in 1804, followed by tokens for 1/6 and 3/- between 1811 and 1816.
In 1816, a new silver coinage was introduced in denominations of 6d, 1/-, 2/6 (half-crown) and 5/- (crown). The crown was only issued intermittently until 1900. It was followed by a new gold coinage in 1817 consisting of 10/- and £1 coins, known as the half sovereign and sovereign . The silver 4d coin was reintroduced in 1836, followed by the 3d in 1838, with the 4d coin issued only for colonial use after 1855. In 1848, the 2/- _florin _ was introduced, followed by the short-lived double florin in 1887. In 1860, copper was replaced by bronze in the farthing (quarter penny, 1⁄4d), halfpenny and penny.
During the First World War , production of the half sovereign and sovereign was suspended, and although the gold standard was later restored, the coins saw little circulation thereafter. In 1920, the silver standard, maintained at .925 since 1552, was reduced to .500. In 1937, a nickel-brass 3d coin was introduced; the last silver 3d coins were issued seven years later. In 1947, the remaining silver coins were replaced with cupro-nickel , with the exception of Maundy coinage which was then restored to .925. Inflation caused the farthing to cease production in 1956 and be demonetised in 1960. In the run-up to decimalisation, the halfpenny and half-crown were demonetised in 1969.
£1 COIN (NEW DESIGN, 2016)
British coinage timeline:
* 1968: The first decimal coins were introduced. These were
cupro-nickel 5p and 10p coins which were equivalent to, and circulated
alongside, the one shilling coin and the two shilling _or florin_ coin
* 1969: The curved equilateral heptagonal cupro-nickel 50p coin
replaced the 10/- note.
* 1971: The decimal coinage was completed when decimalisation came
into effect in 1971 with the introduction of the bronze 1⁄2p, 1p
and 2p coins and the withdrawal of the 1d and 3d coins.
* 1980: Withdrawal of 6d coins, which had circulated at a value of
* 1982: The word "new" was dropped from the coinage and a 20p coin
* 1983: A £1 coin was introduced.
* 1983: The 1⁄2p coin was last produced.
* 1984: The 1⁄2p coin was demonetised.
* 1990: The crown, worth 25p, was re-tariffed for future issues as a
commemorative coin at £5.
* 1990s: The 5p, 10p and 50p coins became smaller.
* 1991: Pre-decimal 1/- coins, which had continued to circulate with
a value of 5p, were demonetised in 1991 after the 5p coin became
smaller. At the same time larger first generation decimal 5p coins
At present, the oldest circulating coins in the UK are the 1p and 2p copper coins introduced in 1971. No other coins from before 1980 are in circulation. Before decimalisation, a handful of change might have contained coins 100 or more years old, bearing any of five monarchs' heads.
The first sterling notes were issued by the Bank of England shortly after its foundation in 1694. Denominations were initially handwritten on the notes at the time of issue. From 1745, the notes were printed in denominations between £20 and £1000, with any odd shillings added by hand. £10 notes were added in 1759, followed by £5 in 1793 and £1 and £2 in 1797. The lowest two denominations were withdrawn after the end of the Napoleonic wars . In 1855, the notes were converted to being entirely printed, with denominations of £5, £10, £20, £50, £100, £200, £300, £500 and £1000 issued.
Bank of Scotland
With the extension of sterling to Ireland in 1825, the Bank of Ireland began issuing sterling notes, later followed by other Irish banks. These notes included the unusual denominations of 30/- and £3. The highest denomination issued by the Irish banks was £100.
In 1826, banks at least 65 miles (105 km) from London were given
permission to issue their own paper money. From 1844, new banks were
excluded from issuing notes in
England and Wales
In 1914, the Treasury introduced notes for 10/- and £1 to replace
gold coins. These circulated until 1928, when they were replaced by
Bank of England notes. Irish independence reduced the number of Irish
banks issuing sterling notes to five operating in
Bank of England reintroduced £10 notes in 1964. In 1969, the
10/- note was replaced by the 50p coin to prepare for decimalisation.
Bank of England notes were reintroduced in 1970, followed by £50
in 1981. A £1 coin was introduced in 1983, and
Bank of England £1
notes were withdrawn in 1988. Scottish and Northern Irish banks
followed, with only the Royal
Bank of Scotland
UK notes include raised print (e.g. on the words "Bank of England"); watermarks; embedded metallic thread; holograms; and fluorescent ink visible only under UV lamps . Three printing techniques are involved: offset litho , intaglio and letterpress ; and the notes incorporate a total of 85 specialized inks.
The £5 polymer banknote , issued by Northern Bank (now Danske Bank ) in 2000, was the only polymer note in circulation until 2016, although Danske Bank also produces paper-based £10, £20 and £50 notes. The Bank of England introduced £5 polymer banknotes in September 2016, and the paper £5 notes were withdrawn in 2017. A polymer £10 banknote is due to be introduced in September 2017.
The Bank of England produces notes named "giant" and "titan". A giant is a one million pound note, and a titan is a one hundred million pound bank note, of which there are about 40. Giants and titans are used only within the banking system .
As the central bank of the
Unlike banknotes which have separate issuers in
Crown Dependencies , the
Manx pound ,
British Overseas Territories are responsible for the monetary policy
of their own currencies (where they exist), and have their own ISO
4217 codes. The
LEGAL TENDER AND NATIONAL ISSUES
The British Islands (red) and overseas territories (blue) using the Pound or their local issue.
Legal tender in the
Throughout the UK, £1 and £2 coins are legal tender for any amount,
with the other coins being legal tender only for limited amounts. Bank
Bank of England, Scottish, Northern Irish, Channel Islands, Isle of
Man, Gibraltar, and Falkland banknotes may be offered anywhere in the
UK, although there is no obligation to accept them as a means of
payment, and acceptance varies. For example, merchants in England
generally accept Scottish and Northern Irish bills, but some
unfamiliar with them may reject them. However, Scottish and Northern
Irish bills both tend to be accepted in
Commemorative £5 and 25p (crown) coins, rarely seen in circulation, are legal tender, as are the bullion coins issued by the Mint.
COIN MAXIMUM USABLE AS LEGAL TENDER
£100 (produced from 2015) unlimited
£20 (produced from 2013) unlimited
£5 (post-1990 crown) unlimited
25p (pre-1990 crown) £10
In 2006, the House of Commons Library published a research paper which included an index of prices in pounds for each year between 1750 and 2005, where 1974 was indexed at 100.
Regarding the period 1750–1914 the document states: "Although there was considerable year on year fluctuation in price levels prior to 1914 (reflecting the quality of the harvest, wars, etc.) there was not the long-term steady increase in prices associated with the period since 1945". It goes on to say that "Since 1945 prices have risen in every year with an aggregate rise of over 27 times".
The value of the index in 1751 was 5.1, increasing to a peak of 16.3 in 1813 before declining very soon after the end of the Napoleonic Wars to around 10.0 and remaining in the range 8.5–10.0 at the end of the nineteenth century. The index was 9.8 in 1914 and peaked at 25.3 in 1920, before declining to 15.8 in 1933 and 1934—prices were only about three times as high as they had been 180 years earlier.
Inflation had a dramatic effect during and after
World War II
The following table shows the equivalent amount of goods and services that, in a particular year, could be purchased with £1.
The table shows that from 1971 to 2015 the British pound lost about 92% of its buying power.
BUYING POWER OF ONE BRITISH POUND COMPARED TO 1971 GBP YEAR EQUIVALENT BUYING POWER YEAR EQUIVALENT BUYING POWER YEAR EQUIVALENT BUYING POWER YEAR EQUIVALENT BUYING POWER YEAR EQUIVALENT BUYING POWER
1971 £1.00 1981 £0.271 1991 £0.152 2001 £0.117 2011 £0.0900
1972 £0.935 1982 £0.250 1992 £0.146 2002 £0.115 2012 £0.0850
1973 £0.855 1983 £0.239 1993 £0.144 2003 £0.112 2013 £0.0826
1974 £0.735 1984 £0.227 1994 £0.141 2004 £0.109 2014 £0.0800
1975 £0.592 1985 £0.214 1995 £0.136 2005 £0.106 2015 £0.0780
1976 £0.510 1986 £0.207 1996 £0.133 2006 £0.102
1977 £0.439 1987 £0.199 1997 £0.123 2007 £0.0980
1978 £0.407 1988 £0.190 1998 £0.125 2008 £0.0943
1979 £0.358 1989 £0.176 1999 £0.123 2009 £0.0952
1980 £0.303 1990 £0.161 2000 £0.119 2010 £0.0910
The smallest coin in 1971 was the 1⁄2p, worth about 6.4p in 2015 prices.
The pound is freely bought and sold on the foreign exchange markets around the world, and its value relative to other currencies therefore fluctuates.
As of 7 October 2016 , £1 was worth US$ 1.24, € 1.11, ¥ 128, CHF 1.22, A$ 1.64, C$ 1.65 or INR 82.83.
CURRENT GBP EXCHANGE RATES
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From Yahoo! Finance: AUD CAD CHF EUR HKD JPY USD INR
From XE: AUD CAD CHF EUR HKD JPY USD INR
From OANDA: AUD CAD CHF EUR HKD JPY USD INR
From fxtop.com: AUD CAD CHF EUR HKD JPY USD INR
Sterling is used as a reserve currency around the world and is currently ranked 3rd in value held as reserves. The percental composition of currencies of official foreign exchange reserves since 1995.
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_ Wikimedia Commons has media related to POUND STERLING _.
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