English currency: how do they pay in England? Currency unit of England Money in England name table

GBP(symbol £; bank code: GBP) is divided into 100 pence (singular: penny) and is the currency of the United Kingdom, Crown Dependencies (Isle of Man and Channel Islands) and the British External Territories of South Georgia and the South Sandwich Islands, British Atlantic Territory and Indian Oceans.

This article talks about the history of the pound sterling and its issue in England, Great Britain and the United Kingdom. For further information see also Manx pound, Jersey pound and Guernsey pound. The Gibraltar pound, the Falkland Islands pound and the Saint Helena pound are separate currencies that follow the exchange rate of the pound sterling.

Sterling currently makes up the third largest portion of the world's foreign exchange reserves, behind the US dollar and the euro. The Streling pound is the fourth most exchangeable currency on foreign exchange markets after the US dollar, euro and Japanese yen.

Name

Full official name GBP(plural: pounds sterling) is used mainly in formal contexts and when it is necessary to identify the currency used within the United Kingdom, in contrast to currencies of the same name. In other cases the word is usually used lb.. The name of the currency is sometimes shortened to the word "sterling", especially in wholesale financial markets, but not in the name of the amount; So, they say “payment is accepted in sterling,” but never “it costs five sterling.” Sometimes the abbreviations "ster" or "stg" are used. Term British pound widely used in less formal contexts, despite not being the official name of the currency. Common slang name quid(plural quid).

The appearance of the term sterling dates back to 775, when the Saxon states issued silver coins called “sterling”. 240 coins were minted from one pound of silver, which was approximately equal to the weight of a troy pound. For this reason, large payments began to be made in “pounds of silver coins, sterling.” This phrase was later shortened to "pounds sterling". After the conquest of England by the Normans, to simplify calculations, the pound was divided into 20 shillings and 240 pence. For a detailed etymology of the word “sterling”, see the section 925 silver.

Currency sign - pound sign, originally with two cross bars ₤ , later the sign with one crossbar became more common £ . The pound sign comes from the old letter "L", which stands for LSD - librae, solidi, denarii- which corresponds to pounds, shillings and pence in the original duodecimal monetary system. Libra was the original unit of weight in Rome, the word comes from Latin and meant “scales” or “balance”. The bank currency code in the International Organization for Standardization is 4217 - GBP (Great Britain pound). The abbreviation UKP is sometimes used, but it is incorrect. Crown dependencies use their own code: GGP (Guernsey pound), JEP (Jersey pound) and IMP (Isle of Man pound). Shares are often traded in pence, so traders may refer to penny, GBX (sometimes GBp) when recording a share price.

Division and other units

Decimal system

Since decimalization in 1971, the pound sterling has been divided into 100 pence (until 1981 referred to as the "new penny" on specie money). The symbol for the penny is "p"; hence an amount such as 50 pence (£0.50) is usually pronounced "50 pi" rather than "50 pence". This also helped to differentiate between new and old pence during the transition to the decimal system.

Predecimal system

Before decimalization, the pound was divided into 20 shillings, and each shilling consisted of 12 pence, which amounted to 240 pence in the pound. "s" was the shilling sign. This is not the first letter of the word shilling, but the beginning of the Latin word solidus ( solid ) . The symbol for the penny was the letter "d", from the French denier, which comes from the Latin word denarius(denarius) (solidus and denarius were ancient Roman coins). A mixed amount of shillings and pence, such as 3 shillings and 6 pence, was written as "3/6" or "3s 6d" and pronounced "three and six". 5 shillings was written as "5s" or, more commonly, "5/-".

Coins of different denominations had and continue to have specific names, such as "crown", "farthing/penny", "sovereign" and "guinea". Details can be found in the sections "Pound Sterling Coins" and "List of British Coins and Banknotes".

Story

After the adoption of the euro, sterling became the oldest currency in the world still in circulation.

Anglo-Saxons

The origins of sterling date back to the reign of King Offa of Mercia, who introduced the silver penny. It was similar to the denarius in the new currency system of Charlemagne's empire. As in the Carolingian currency system, 240 pence weighed one pound (in accordance with Charlemagne's pound), a shilling corresponded to Charlemagne's shilling and was equal to 12 denarii. When the penny was introduced, it weighed 22.5 troy grains of fine silver (30 Tower grains; about 1.5 grams), indicating that the Mercian pound weighed 5,400 troy grains (the Mercian pound became the basis for the Tower pound, which weighed 5,400 troy grains , which amounted to 7,200 Tower grains). At this time, the name sterling was not yet used. The penny quickly spread to other Anglo-Saxon states and became the standard coin of what later became England.

Middle Ages

Early pennies were minted from sterling silver (as pure as possible). However, in 1158, King Henry II (who was called Tilby penny) introduced a new system of coinage. Coins were now minted from silver standard 925 (92.5%). Such silver became the standard and continues to be so in the 20th century and today is called coin silver, by association with currency. Coin silver is heavier than the fine silver (i.e. 0.999/99.9% pure, etc.) that was used in the past, and therefore coins made of this silver did not wear out as quickly as coins made of fine silver. English currency was made exclusively from silver until 1344, when noble gold was successfully introduced into circulation. However, silver remained a legal material for sterling until 1816. During the reign of Henry IV (1412-1421) the weight of the penny dropped to 15 grains of silver, and in 1464 the penny weighed 12 grains.

Tudor rule

During the reigns of Henry VIII and Edward VI, the minting of silver coins was sharply reduced, although in 1526 the pound returned to the troy pound of 5,760 grains. In 1544, silver coins were produced containing only one-third silver and two-thirds copper, equal to .333 fine silver or 33.3% pure silver. The result was a copper-like appearance, but a relatively pale color. In 1552, a new coinage of 925 silver coins was introduced. However, the weight of the penny was reduced to 8 grains, meaning that 1 troy pound of .925 silver could produce 60 shilling coins. The standard silver was considered to be the "60 shilling standard", which continued until 1601, when the "62 shilling standard" appeared, which reduced the weight of the penny to 7 grains. During this time, the size and value of gold coins varied significantly.

Accession of Scotland

In 1603, England and Scotland were united, but each state retained its own government and currency. The Scottish pound was equal to sterling, but suffered a much stronger devaluation, 12 Scots pounds equaled one pound sterling. In 1707, after the unification of the two kingdoms and the formation of Great Britain, the Scottish pound was replaced by sterling of the same value.

Unofficial gold standard

In 1663, a new gold coinage was introduced, based on the 22 carat guinea. Set at 44½ to the troy pound from 1670, this coin value varied until 1717, when it was set at 21 shillings (21/-, £1.05). However, despite attempts by Sir Isaac Newton, the Keeper of the Mint, to reduce the value of the guinea, this increased the value of gold relative to silver compared to other European countries. British merchants sent silver as payment abroad, while goods for export were paid for in gold. Subsequently, there was a flow of silver out of the country and a flow of gold into the country, leading to the establishment of a gold standard in Great Britain. In addition to this, there was a chronic shortage of silver coins.

Establishment of modern currency

The Bank of England was formed in 1694, followed a year later by the Bank of Scotland. Both banks began issuing paper money as the Bank of England gained greater importance after 1707. During the Revolutionary War and Napoleonic Wars, Bank of England notes were legal tender and their value fluctuated relative to gold. The bank also issued silver tokens to alleviate the shortage of silver coins.

gold standard

In 1816, the gold standard was officially adopted, while the silver standard was reduced to 66 shillings (66/-, 2.3 pounds), replacing silver coins with the issuance of tokens (that is, reducing the value of the precious metal). In 1817 the sovereign was introduced. The coins were minted from 22 carat gold and contained 113 grains of gold, they replaced the guinea and became the standard British gold coin without changes to the gold standard. In 1825, the Irish pound, which since 1701 had been equal to the sterling at the rate of 13 Irish pounds = 12 pounds sterling, was replaced by the sterling at the same rate.

During the 19th and early 20th centuries, the gold standard was adopted in many other countries. As a result, the rates of various currencies could be determined simply by their respective gold standards. The pound sterling was equal to 4.886 US dollars, 25.22 French francs (or equivalent currencies in the Latin Monetary Union), 20.43 German marks or 24.02 Austro-Hungarian kroner. Following the International Monetary Conference in Paris, the possibility of the United Kingdom joining the Latin Monetary Union was discussed, and the Royal Commission on the International Monetary System, having considered this possibility, decided against accession.

The gold standard was suspended at the start of the war when the Bank of England and Treasury notes became legal tender. Before the First World War, the United Kingdom had one of the most developed economies in the world, including 40% foreign investment. However, by the end of the war the country owed £850 million, mostly to the United States, with interest costing the country 40% of all government expenditures. In an attempt to regain stability, a variation on the gold standard was introduced in 1925, whereby the currency was equal to the pre-war value of gold, although the currency could only be exchanged for gold bullion, not coins. This was abandoned on September 21, 1931, during the Great Depression, and sterling underwent an initial devaluation of 25%.

Empire use

Sterling was used throughout most of the British Empire. In some parts it was used along with local currency. For example, the gold sovereign was legal tender in Canada, despite the existence of the Canadian dollar. Several colonies and possessions adopted the pound as their own currency. Australian, British West African, Cypriot, Fijian, Irish, Jamaican, New Zealand, South African and Southern Rhodesian pounds appeared. Some of these pounds retained parity with sterling throughout their existence (eg the South African pound), while others lost their independence following the end of the gold standard (eg the Australian pound). These currencies and others associated with the sterling made up the sterling area.

Bretton Woods agreement on the post-war monetary system

In 1940, an agreement signed with the US equalized the pound to the US dollar at a ratio of £1 = $4.03. This rate continued through World War II and became part of the Bretton Woods system that governed post-war exchange rates. Under constant economic pressure and despite months of assurances to the contrary, the government finally lowered the value of the pound by 30.5% to $2.80 on September 19, 1949. This step led to a depreciation of other currencies against the dollar.

In the mid-1960s, the pound came under renewed pressure as the exchange rate against the dollar came to be considered too high. In the summer of 1966, with the pound falling in the currency markets, the Wilson government tightened foreign exchange controls. Among the measures taken was a ban on tourists taking more than 50 pounds out of the country, the amount was increased in 1979. The pound was eventually reduced by 14.3% to $2.40 on November 18, 1967.

Switch to decimal system

On 15 February 1971, the United Kingdom switched to a decimal system, replacing the shilling and penny with a single coin, the new penny. The word "new" ceased to be used after 1981.

Changes in the value of the pound

With the collapse of the Bretton Woods system - a significant role played by British foreign exchange dealers who created a strong market for the Eurodollar, making it difficult for the government to maintain the gold standard of the US dollar - the value of the pound fluctuated in the early 1970s and therefore caused the exchange rate to rise in the market . The sterling zone ended its existence at this time, with the majority of its members also opting for a free currency against the pound and dollar.

Another crisis followed in 1976 when it became known that the International Monetary Fund (IMF) believed that the pound should be equal to $1.50, and as a result the pound fell to $1.57 and the government decided to borrow $2.3 billion pounds from the IMF. In the early 1980s, the pound advanced to the $2 level as interest rates rose in response to monetary policy and the high exchange rate was blamed for the deep recession in 1981. The pound was at its lowest in February 1985 at $1.05, before rising to $2 in the early 1990s.

Following the German mark

In 1988, Margaret Thatcher's Chancellor of the Exchequer, Nigel Lawson, believed that the pound should "shadow" the West German mark, which would inadvertently lead to soaring inflation as the economy grew rapidly due to inappropriately low interest rates. (For ideological reasons, the Conservative government rejected alternative mechanisms to control the explosion of credit flows; former Prime Minister Edward Heath called Lawson a "one-stick golfer."

Following the European Currency Unit

On October 8, 1990, the Conservative government decided to join the European Exchange Rate Mechanism (ERM), with the pound equal to DM 2.95. However, the country was forced to withdraw from the system on Black Wednesday (16 September 1992) as the British economy led to exchange rate instability. Stockbroker George Soros became famous for making about $1 billion from the decline in the value of the pound.

On Black Wednesday, interest rates jumped between 10% and 15% in a failed attempt to stop the pound falling below European exchange rates. The exchange rate fell to DM 2.20. Proponents of a weaker pound/DM exchange rate gained support as the low pound supported export trade and contributed to the economic prosperity of the 1990s. Since the beginning of 2005, the pound/euro exchange rate has returned to an average of approximately £1.00:€1.46, the equivalent of DM 2.85.

Following inflation targets

In 1997, the newly elected Labor government transferred responsibility for the daily control of interest rates to the Bank of England (a policy originally pursued by the Lib Dems). The Bank is now responsible for setting its benchmark interest rate to keep inflation at a consumer price index level very close to 2%. Once CPI inflation is one percentage point above or below the target, the Governor of the Bank of England must write an open letter to the Chancellor of the Exchequer explaining the reasons for the change and outlining the steps that will be taken to bring inflation back to 2%. no norm. On April 17, 2007, the consumer price index inflation rate was 3.1% (retail price index inflation was 4.8%). Thus, for the first time, the Governor of the Bank had to publicly explain to the government why the inflation rate was one percent higher than normal.

Euro

As a member of the European Union, the United Kingdom can adopt the euro as its currency. However, the issue remains politically controversial, not least because the United Kingdom was forced to abandon the previous European exchange rate mechanism (see above), entering into a system with an incorrect fixed exchange rate. Prime Minister Gordon Brown, while still Chancellor of the Exchequer, ruled out adopting the euro for the foreseeable future, saying non-alignment was the right decision for Britain and Europe.

Former Prime Minister Tony Blair's government promised to hold a public referendum on whether to join and carry out "five economic tests" to ensure adoption of the euro would be in the national interest. In addition to this internal (national) criterion, the United Kingdom had to accept the economic conditions of rapprochement of the European Union (Maastricht conditions) before the transition to the euro was allowed. The UK's annual government GDP deficit currently exceeds a certain threshold. In February 2005, 55% of the population of the United Kingdom were against the adoption of the euro, while 30% were in favor. The idea of replacing the pound with the euro was controversial in British society due to the pound's association with British sovereignty and because it could, according to some critics, lead to suboptimal interest rates, which would harm the British economy.

The pound was not included in the second European Exchange Rate Mechanism (ERM II) after the introduction of the euro. Denmark and the United Kingdom are countries that have refused to adopt the euro. Technically, all other EU members must accept the euro; however, this may be delayed indefinitely (as in the case of Sweden) by refusing to join the second European Exchange Rate Mechanism. The Conservative Party in Scotland argues that in Scotland they believe that the adoption of the euro will mean the end of the existence of territorially significant notes, since the European Central Bank does not allow the existence of national or subnational types of notes.

The Scottish Nationalist Party does not see this as a significant problem, since an independent Scotland would have its own national coins, and the party is pursuing a policy of introducing a single currency. On 1 January 2008, Akrotiri and Dhekelia, two territories on the island of Cyprus under British sovereignty, began using the euro (along with the rest of the Republic of Cyprus).

Current influence

Although the pound and the euro are independent of each other, they have been used together for a long time, but since mid-2006 this relationship has weakened. Concerns about inflation in the United Kingdom led the Bank of England to raise interest rates sharply in late 2006 and throughout 2007, resulting in the largest appreciation of sterling against the euro since January 2003. This caused a chain reaction against other major currencies, with the pound reaching its highest level in 15 years against the US dollar on April 18, 2007, breaking the US$2 level the day before for the first time since 1992. Since that time, the pound has continued to strengthen its position against the dollar, like many other world currencies, and on November 7, 2007, it reached $2.11610 for the first time in 26 years. However, from the end of 2007, the pound began to fall significantly against the euro, although not as sharply as the dollar, which fell below €1.25 for the first time in April 2008.

Coins

Predecimal system

The silver penny was the main and often the only coin in circulation from the 8th to the 13th centuries. Although smaller coins than pennies were minted (see farthing and halfpennies), cut half and quarter pennies were more common as change coins. Few gold coins were minted, and the gold penny (valued at 20 silver pennies) was rare. However, a silver 4p coin appeared in 1279, and a half-price coin followed in 1344. In 1344 the minting of gold coins was also established, with the introduction (after the gold florin had not come into use) of the noble, valued at 6 shillings 8 pence, together with the half and quarter noble. The reforms of 1464 saw the value of coins, both silver and gold, fall, and the noble was renamed the rayol and valued at 10 silver shillings, while the angel was valued at 6 shillings 8 pence.

During the reign of Henry VII, two important coins were introduced, the shilling (known as teston) in 1487 and the pound (known as sovereign) in 1489. In 1526 several new denominations of gold coins were added, including the crown and half-crown values of 5 shillings and 2 shillings 6 pence. The reign of Henry VIII (1509-1547) saw a significant decline in the value of coins, which continued during the reign of Edward VI (1547-1553). However, this decline was stopped in 1552 and new silver coinage was introduced, including coins for 1, 2, 3, 4 and 6d, 1s, 2s 6d and 5s. During the reign of Elizabeth I (1558-1603), ¾ and 1½ penny coins were added, although these denominations did not last long. Gold coins - half-crown, crown, angel, half-sovereign and sovereign. During Elizabeth's reign, a horse-drawn screw press was also introduced to produce the first ground coins.

After the accession of the Scottish King James VI to the English throne, new gold coins were introduced, which included the spur raiol (15 shillings), the unit (20 shillings) and the rose raiol (30 shillings). The 20 shilling Laurel followed in 1619. The first metal coins, tin and copper farthings, were also introduced. Copper halfpenny coins followed during the reign of Charles I. During the English Civil War, coins were produced under siege conditions and were often of unusual denominations.

Following the restoration of the monarchy in 1660, coinage was transformed, and in 1662 forged coins began to be produced. The guinea was introduced in 1663, soon followed by coins in denominations of ½, 2 and 5 guineas. The silver coins were in denominations of 1, 2, 3, 4 and 6 pence, 1 shilling, 2 shillings 6 pence and 5 shillings. Due to the widespread export of silver in the 18th century, the issue of silver coins gradually declined, the crown and half-crown were not minted after the 1750s, and the 6p and 1 shilling coins ceased to be issued in the 1780s. The response was the introduction of copper 1 and 2 penny coins and a gold ⅓ guinea of 7 shillings in 1797. The copper penny was the only one of these coins that lasted the longest.

To reduce the shortage of silver coins, from 1797 to 1804 the Bank of England issued Spanish dollars (8 reals) and other Spanish and Spanish colonial coins. Small coins depicted the king's head. These coins were used until 1800 with a rate of 4 shillings 9 pennies to 8 reals. After 1800 the rate became 5 shillings to 8 reais. The Bank also issued silver 5 shilling tokens (patterned after Spanish dollars) in 1804, followed by 1 shilling and 3 shilling tokens from 1811 to 1816.

In 1816, new coinage was introduced in denominations of 6d, 1s, 2s 6d and 5s. The crown was only issued periodically until 1900. This was followed by a new system of gold coinage in 1817, which included 10 shilling and 1 pound coins called half sovereigns and sovereigns. The silver 4d coin was reintroduced in 1836, followed by 3d coins in 1838 and 4d coins which were minted for colonial use only after 1855. The 2 shilling florin was introduced in 1848, followed by the double florin in 1887, which did not last long. In 1860 copper was replaced by bronze in the production of farthings, halfpennies and pennies.

During the First World War, the issue of half sovereigns and sovereigns was temporarily suspended, and although the gold standard was restored, the coins were not widely used again. In 1920, the silver standard, which had been 925 silver since 1552, dropped to .500. A nickel brass 3p coin was introduced in 1937, with the last silver 3p coins issued seven years later. In 1947, the remaining silver coins were replaced with cupronickel. Inflation led to the cessation of minting of the farthing in 1956 and its withdrawal from circulation in 1960. In an effort to move to the decimal system, the halfpenny and half-crown were withdrawn from circulation in 1969.

Decimal system

The first decimal coins were introduced in 1968. These were cupronickel 5p and 10p coins which were equivalent and used alongside the 1s and 2s coins. The curved equilateral heptagonal cupronickel silver 50p coin was replaced by the 10 Tshilling note in 1969. The changeover to decimalization was completed when it was adopted in 1971, with the introduction of bronze ½, 1 and 2 penny coins and the elimination of 1 and 3 penny coins. The 6p coin was in circulation until 1980 with a value of £2½. In 1982, the word "new" was dropped from coinage and the 20p coin was introduced, followed by the introduction of the £1 coin in 1983. The ½ penny coin was introduced in 1983 and discontinued in 1984. The 1990s saw the replacement of bronze with copper-plated steel and a reduction in the size of the 2p, 10p and 50p coins.
The old 1 shilling coins, which remained in use and were equal to 5 pence, were withdrawn from circulation in 1991, following the reduction in size of the 5 penny coin, and the 2 shilling coins were similarly withdrawn from circulation in 1993. Bimetallic British £2 coins. The modern coin (1997-present £2 coin) was introduced in 1998.

Currently, the oldest coins in circulation in the United Kingdom are the copper 1p and 2p coins, introduced in 1971. Before decimalization, small coins could not be older than a hundred years or more, with the image of any of the five monarchs on the obverse.

In April 2008, a widespread redesign of the coins was announced to be released in the summer of 2008. The new 1, 2, 5, 10, 20 and 50p coins will feature parts of the king's shield on the reverse, while the new £1 coin will feature the entire shield.

Banknotes

The first paper sterlings were issued by the Bank of England shortly after its founding in 1694. Denominations were originally designated on banknotes at the time of printing. From 1745, notes were printed in denominations ranging from £20 to £1,000, with shillings added for odd numbers. £10 notes appeared in 1759, followed by £5 notes in 1793 and £1 and £2 notes in 1797. The two lowest denominations were abolished after the end of the Napoleonic Wars. In 1855, banknotes were printed in full in denominations of £5, £10, £20, £50, £100, £200, £300, £500 and £1000.

The Scottish Bank began issuing banknotes in 1695. Although the Scots pound was still the national currency of Scotland, banknotes issued were in sterling denominations and ranged up to £100. From 1727, the Royal Bank of Scotland also began issuing banknotes. Both banks issued coins with a face value of guineas as well as pounds. In the 19th century, regulations limited the smallest denomination note issued by the Bank of Scotland to £1, a note not permitted in England.

With the introduction of sterling into Ireland in 1825, the Bank of Ireland began issuing sterling notes, later followed by the rest of the Irish banks. These notes included the usual denominations of 30 shillings and 3 pounds. The highest denomination of banknotes issued by an Irish bank was the £100 denomination.

In 1826, banks within 65 miles (105 km) of London were allowed to issue their own paper money. From 1844, new banks were not allowed to issue banknotes in England and Wales, but not in Scotland and Ireland. Consequently, the number of private banknotes decreased in England and Wales and increased in Scotland and Ireland. The last English private banknotes were issued in 1921.

In 1914, the Treasury introduced 10 shilling and £1 notes to replace gold coins. These notes remained in circulation 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 Northern Ireland. The Second World War had a radical impact on the issue of Bank of England notes. Fearing a mass production of counterfeit money by the Nazis (see Operation Bernhard), all notes in denominations of £10 and above were stopped, leaving only the 10 shilling, £1 and £5 notes available for issue. The issue of banknotes in Scotland and Northern Ireland was not affected, with denominations remaining in £1, £5, £10, £20, £50 and £100.

The Bank of England reintroduced £10 notes in 1964. In 1969, the 10 shilling note was replaced by a 50 penny coin as part of preparations for the transition to decimalization. Bank of England £20 notes were reintroduced in 1970, followed by £50 notes in 1982. The subsequent introduction of the £1 coin in 1983 allowed the Bank of England £1 notes to be abolished in 1988. The Bank of England was followed by the Bank of Scotland and the Bank of Northern Ireland, only the Royal Bank of Scotland continued to issue banknotes of this denomination.

Legal tender and regional issues

Legal tender in the United Kingdom (according to the Royal Mint) means "that a debtor cannot be prosecuted for non-payment if he pays in legal tender in court. This does not mean that any transaction must be carried out in legal tender or only to the extent permitted by law. Both parties may agree to accept any form of payment, legal tender or otherwise, in accordance with their wishes. To comply with the strict rules governing this legal tender, it is necessary to specify, e.g. the exact amount, since further changes cannot be demanded." In the United Kingdom, £1 and £2 coins are legal tender for any amount, while other coins are legal tender for a limited amount only. In England and Wales, Bank of England notes are also legal tender for any amount. Scotland and Northern Ireland currently have no legal tender banknotes, although the Bank of England 10 shilling and £1 banknotes were so, as were Scottish banknotes, during the Second World War (the Security Act 1939; this status was abolished January 1, 1946). However, the banks made contributions to the Bank of England to cover the number of banknotes they issued. In the Channel Islands and the Isle of Man, local banknotes are legal tender in their respective jurisdictions. Banknotes from Scotland, Northern Ireland, the Channel Islands and the Isle of Man are sometimes not accepted in shops in England. Shopkeepers in Britain can refuse any form of payment, even if it is in legal tender, since debt does not exist when payment is offered at the same time as there is an offer of goods or services. When paying a restaurant bill or other payment, legal tender is accepted, but payment is usually made by some other method (such as a credit card or check). Commemorative £5 and 25p ("crown") coins, which are rarely seen, are also legal tender, as are weight coins issued by the mint.

About the value of British money

In 2006, the House of Commons Library published a document that included an index of the value of the pound for each year from 1750 to 2005, with the value of the pound in 1974 being 100. (This was a new version of documents previously published in 1998 and 2003). Looking at the period from 1750 to 1914, the document states: "Despite years of significant price fluctuations before 1914 (depending on harvests, wars, etc.), there has been no sustained increase in prices since 1945." It is further stated that “Since 1945, prices have risen every year by a cumulative factor of 27.” The index in 1750 was 5.1, peaking at 16.3 in 1813 before quickly declining after the end of the Napoleonic Wars to 10.0 and remaining in the range of 8.5 - 10.0 at the end of the nineteenth century. The index's reading in 1914 was 9.8 and peaked at 25.3 in 1920, before falling to 15.8 in 1933 and 1934 - prices were only three times higher than prices 180 years earlier. Inflation had a strong effect during and after the Second World War - the index was 20.2 in 1940, 33.0 in 1950, 49.1 and 1960, 73.1 in 1970, 263.7 in 1980, 497.5 in 1990, 671.8 in 2000 and 757.3 in 2005.

Value in relation to other currencies

The pound can be freely bought and sold on foreign exchange markets around the world, and therefore its value relative to other currencies fluctuates (increasing when traders buy, decreasing when selling). This order is traditional among the main monetary units with the highest value in the world. On April 19, 2008, £1 was equal to $1.99 US or €1.26.

Historical exchange rates (since 1990) can be found in the Exchange Rates section of the UK Economics Accounting List.
you can see the current wholesale rates of sterling currencies against other currencies.

The pound as the main international reserve currency

Sterling is used as a reserve currency around the world and is currently ranked as the third largest reserve currency. The percentage that the pound makes up of the total reserve has increased in recent years due to the stability of the British economy and government, continued appreciation in value relative to other currencies and relatively high interest rates compared to other major currencies such as the dollar, euro and yen.

One of the oldest and most reliable currencies in the world, the British pound sterling is in use not only in the UK itself. Its “jurisdiction” is much wider, which is not surprising, given the solid colonial history of the British. So, the English currency is also in circulation in the Falkland Islands, St. Helena and Gibraltar, and, of course, in Wales, Scotland and Northern Ireland.

The pound is divided into a hundred pence, coins in denominations of 2, 5, 10, 50 pence are called that way, but 1 “pence” is called the feminine gender - a penny. In the international currency register, British money is designated as GBR (an abbreviation for Great Britain Pound). Banknotes in circulation have denominations of 5, 10 and 20, 50 pounds. Things didn’t work out with the euro in Britain; the government refused to switch to a single European currency. So the pound is now the main currency of Great Britain.

Why is the pound so stable?

The refusal to switch to the euro is associated with the extreme stability of the pound, thanks to which the latter is the world's reserve currency, second only to the dollar. The English currency is well backed - the country's GDP is 7th in the world in terms of quality indicators. Let's add here a very developed industrial production and a confidently high position in the software development market, and it becomes clear why the position of the pound has not been shaken even after the UK left the eurozone (formal for now). The exchange rate of the pound may fluctuate due to changes in stock prices for energy resources, but these fluctuations are very insignificant. The Ministry of Economics and a number of the country's banks, including the national one, work to maintain the high stability that the British currency boasts.

How did English money appear?

For the first time, the prototypes from which the monetary units of Great Britain were derived appeared during the time of Offa, one of the kings of Mercia (then the name of East Anglia). It was then that Off introduced the silver penny. And a little later, at about 775, the first full-weight pounds appeared. They were coins made of pure silver, 240 coins came out of a pound of silver, hence the name.

Interesting facts: Although smaller coins were in use in Great Britain from the 8th to the 13th centuries, the British preferred to cut the silver penny into halves and quarters and exchange it in this way. There were few gold pennies and their exchange rate was 20 silver.

After the 14th year, new coins appeared: farthing, guinea, sovereign, crown. More gold coins began to be minted, but their value steadily fell. Even later, small change coins made of tin, copper and metal appeared. In 1937, nickel coins (the word nickel, since then, another name for small change) were first used, and ten years later cupronickel replaced silver.

Which currency is best for exchange?

It should be said that it makes absolutely no difference which of the world’s leading currencies you take with you; in London or any other large city in England you can exchange euros and dollars without much loss, but with rubles it will be more difficult. You can purchase English currency units at exchange offices and banks. The rate in the latter will be more profitable.

Where to exchange and what are the terms of exchange?

The best rate will be offered by bank branches operating from 9 to 15:30 daily. The exchange commission here ranges from 0.5 to 1% of the amount. Here you can withdraw pounds from banks using international cards (MasterCard, American Express, Visa) and cash traveler's checks. Almost any bank will ask you for your passport for exchange. If you need to change money at odd hours, you can use the services of 24-hour exchangers (remember, British currency is only available 24 hours a day at those exchangers located at airports, train stations and in busy places in big cities like London.

Prices for products and services in Britain are quite high; even a 0.5 liter bottle of drinking water will cost you one pound. Average daily costs per person (including accommodation and transport) will be up to £70-80. So, when going to England, plan your budget well in advance; unforeseen expenses can make a significant hole in it.

GBP is the national currency of the United Kingdom of Great Britain and Northern Ireland. Reserve currency. One of the main currencies in the Forex market. Now in 4th place in terms of foreign exchange reserves.

Pound symbol and code

UK currency bank code is GBP(an abbreviation of the official name - Great Britain Pound).

The pound is represented by the symbol £(U+20BA) - handwritten capital Latin letter L with 1 or 2 horizontal strokes.

Etymology

In the 12th century, English silver coins were called sterling. 240 sterling weighed just over 373 grams - that was a pound. In Latin pondus means weight, heaviness. That is, initially the pound sterling really meant “a pound of pure silver.”

There is a visible connection with the Old English lexeme steorling - “asterisk”. It was the stars that were depicted on silver coins issued in Normandy.

Easterling Silver (literally: silver from the eastern lands) - wear-resistant coins made of a durable silver alloy, created in the north of modern Germany - those territories were formerly called Easterling.

A Brief History of the British Pound

Presumably, the pound appeared in 1158 by decree of Henry I. He deprived goldsmiths of the right to issue money, with whom they often cheated.

Henry I introduced a system of measuring rods. Polished wooden slats served as money. The denomination was indicated by notches. Half of the lath was in use, the other was kept by the king as proof of authenticity. With such a measuring rod one could pay taxes. This monetary system functioned successfully for more than 700 years.

The first coin was issued in England in 1489 - it was a gold sovereign. The last such solvent coin was created in 1982.

Since 1663, the main gold coin in the country has been the guinea (21 shillings - 1 pound plus 1 shilling). It was minted until 1813.

Since 1694, paper bills have been printed (the name has been established since then). Elizabeth I established total control over the issue of coins.

For a long time, the pound was freely exchanged for silver or gold, and only in the 20th century this was abandoned.

by 30% (in 1949) due to an unsuccessful attempt to introduce a peg to other currencies;
by 20% after the liquidation of the gold standard;
by 14% (in 1966);
by 25% after another attempt to peg the pound to a foreign currency - this time to the German mark (in 1988).

Since 1946, the British pound has been a freely convertible currency (that is, there are no restrictions on foreign exchange transactions). It is also one of the 17 clearing currencies of CLS (international settlements are carried out without conversion to other currencies).

Banknotes and coins

All UK money has a portrait of Queen Elizabeth II on the obverse.

Currently, only 4 banknotes are used: 5, 10, 20, 50 pounds. There are 2 series in use - E (after revision) and F. The latest series retained the dimensions of the banknotes and the portrait of the Queen, but has a different design and additional security measures: kinegram and luminescent protection.

Starting from 2016, it is planned to create polymer banknotes: cleaner, safer and more wear-resistant. In 2015, these were used in 48 countries.

1 pound sterling - 100 pence.

1 penny;
2, 5, 10, 20, 50 pence;
1.2 lbs.

Penny coins remain solvent only up to a clearly designated amount. For example, 50 pence coins can be used to pay for a product or service worth up to £10.

1 pound - photo

The £1 coin has been issued since 1983. It differs from coins of lesser value in its thickness (3.15 mm), weight (9.5 g) and characteristic yellow color. Minted from an alloy of copper, nickel and zinc.

The coins of the latest series depict the coat of arms of Great Britain, with the following inscribed on the edge: DECUS ET TUTAMEN (“Decoration and Protection”).

In 2017, £1 coins will change dramatically for the first time in 30 years. They will have 12 sides, minted from 2 metals using the latest technology. The author of the design, 15-year-old David Pearce, proposed depicting 4 plants on the £1 coins, each symbolizing one part of Great Britain: a rose, a thistle, a shamrock and a leek.

The current version of the £1 coin is easy to counterfeit. It is believed that about 3% of coins of this denomination are counterfeit (approximately 45 million pieces).

What do pounds look like?

The £5 note features a portrait of feminist Elizabeth Fry, who became famous for her prison reform efforts. Former Prime Minister of England Winston Churchill should appear on new banknotes in 2016.

10 pounds series E (after revision) contains a portrait of the author of evolutionary theory - Charles Darwin (in the previous version - the writer Charles Dickens).

The old £20 note (featuring the composer Sir Edward Elgar) was withdrawn from circulation in 2010. It was replaced by a banknote with a portrait of the economist Adam Smith - from the new F series.

In 2014, the 50-pound note, which featured Sir John Houblon, the first president of the Bank of England, became insolvent. On the banknote of the new series are Matthew Bolton (industrialist who produced steam engines) and James Watt (Scottish inventor who invented the steam engine).

The pound to dollar ratio is determined on the international foreign exchange market and is constantly fluctuating. 1 pound in dollars as of January 2020 is approximately 1.3.

At the beginning of the twentieth century, 1 pound was equal to 4.9 US dollars. The rate fell to $2.71 in 1966, then to $1.57 in 1976. The historical minimum is 1.05 US dollars per 1 pound sterling (1985).

If you notice an error in the text, please highlight it and press Ctrl+Enter

England is a state with its own independent currency. The pound sterling is considered the hub currency of the United Kingdom of Great Britain, as well as Northern Ireland and Scotland. The money of England is in circulation in all the lands included in it. The pound sterling has a very old history and is a stable currency on the world market.

The British pound sterling is the oldest currency in the world. Since 1066, silver sterling began to be minted in Britain. In 1158, sterling was introduced by Henry II as the English currency. The currency began to be called the pound in the second half of the 12th century. The first pounds contained 12 shillings, each containing 20 pence. There were 2 forints in one penny. That is, one pound sterling was equal to 240 pence, or 480 forints. This system significantly increased the calculations. The shilling was designated by the letter “s” (from the Latin “solidus”, a Roman coin), the penny by “d” (“denier”, denarius - also a Roman coin).

The £1 coin was minted in 1489. Then pounds were also called gold sovereigns - thanks to the image on the obverse of the king, in other words, the sovereign of all subjects. The obverse depicted Henry VII seated on the throne, and the reverse depicted the coat of arms of England. The sovereigns weighed 15.47 grams and were made from .994 gold.
In 1560, Elizabeth I carried out a monetary reform, which made it possible to avoid the depreciation of coins, but increased inflation. All obsolete coins have been replaced with new ones.
In 1694, the Bank of England began producing paper pounds sterling in the form of banknotes.
In 1816, the gold standard was established in Great Britain, the sovereign became the main monetary unit, which had 7.32 grams of pure gold.
The pound sterling occupied a leading position in the world economy as a reserve currency in the 18th and 19th centuries. However, after the Second World War, due to the strengthening of the United States on the world stage, the pound lost its leading position.
In 1971, England, according to the established form, switched to a decimal system - each pound became equal to one hundred pence. Until 1982, coins were minted with the inscription “New”.
In June 1972, a “floating exchange rate” was introduced, which was not supported by the Bank of England, but was formed solely based on the results of trading on the international foreign exchange market.
Due to this, in 1976 the price of one pound sterling fell to less than two dollars, and in 1977 a historical low of $1.72 per pound was reached.

Etymology of the name

The British currency has a complex name. Usually only the pound is used, alternatively the British pound can be called, in order to indicate accurately. History dates back to the year 775 when sterling appeared. These were small silver coins, which, among 240 pieces, made up a full pound, a measure of weight in the Anglo-Saxon lands. So it turns out that when paying for goods and services, pounds of silver sterling were transferred. In everyday life, the phrase has been reduced to two words. The Normans who conquered England retained the wording for the currency, but divided it into twenty shillings, each weighing twelve pence. Later in history, the prefix sterling returned.

Pence has been used since the emergence of proper money in English history and in the modern division of the pound sterling. But its weight and share most of the time were calculated using the 12-digit system, which yielded 240 coins in one measure. The now familiar and integral decimal division system entered the UK rather problematically only in the second mid-twentieth century.

Like any progressive currency, there is a symbol for the pound sterling. To establish amounts calculated in pounds, a symbol or even a simplified but equivalent version is used. The symbol is based on the letter L, which fits into the abbreviation LSD (labra, solidi, denarii). Initially, in particular, this was how the division of English monetary units took place in accordance with the established rules that have been preserved since the time of the Roman Empire. Libra is a unit of weight.

Otherwise, the English pound sterling is classified by the letter code GBP (ISO 4217826), which means Great Britain Pound. Other designations that can sometimes be found, such as UKP, are not considered official. Mostly in the share market and accompanying analyst reports, you will see the symbol GBp (GBX), which defines a given amount in pence. By the way, here you can read about the designation of other currencies of the world.

English money of the past

The name of the English currency, pound sterling, reflects the equivalent price of one pound of silver. One pound of silver was minted into 240 pence (pence and penny are the singular and plural forms of the same word). The word sterling means pure, established standard.

Pennies were represented by a d. (from the word dinar, as opposed to the current designation p.), the shilling was denoted by the sign s or 1/-. The penny and shilling signs were written with or without a dot after the letter.

In England, a non-decimal coin system was used for counting money (rather, it is similar to the duodecimal system of calculation: 1 pound = 240 pence):

pound pound or pound sterling = 4 crowns or 20 shillings, or 240 pence)
sovereign [ˈsɔvrin] sovereign = 20 shillings equivalent to 1 pound
guinea [ˈɡini] guinea = 21 shillings
crown crown = 5 shillings
florin [ˈflɔrin] florin = 2 shillings
shilling [ˈʃiliŋ] shilling = 12 pennies
groat [ɡrəut] grout = 4 pennies
penny [ˈpeni] penny = 4 farthings
farting [ˈfɑːtiŋ] farthing = ¼ penny

Current status

Today in England the national currency is the pound sterling, which is equal to one hundred pence. Coins are produced in denominations of 1, 2, 5, 10, 20, 25, 50 pence, as well as larger ones - 1, 2 and 5 pounds. Banknotes are available in denominations of 5, 10, 20 and 50 pounds. One of the sides of the bill is occupied by the image of Elizabeth II, and the other by the image of another outstanding person of England (including Charles Darwin, James Watt, Matthew Bolton, Adam Smith and others).

Certain territories of Britain (in particular, Scotland or Northern Ireland) issue their own paper money with a different design. Although all UK banks must accept them, in practice they are often refused.

Everything that has a connection with the exchange rates of individual countries is relevant today. As for the exchange rate in the UK, it is floating or fluctuating. This means the value of the pound may fluctuate. These characteristics depend on the situation on the foreign exchange market.

The main monetary unit of England is pounds sterling. This monetary unit is now issued as a reserve for the world monetary fund, which is favored by the stability of the UK economy. Now, despite the advantage of the dollar and the euro, sterling accounts for a third of the world's foreign exchange reserves.

In addition, the British are one of the few who categorically refused to switch to a new currency, the euro, within the European Union, trying to preserve the national one.

In Great Britain, not only paper bills are in use, but also coins and pennies. The first time the penny came into use was during the Mercian period, during the reign of King Offa. The first minted coins were made from silver in 775. From one pound of silver it was possible to make 240 coins, which made up the pound sterling.
From the eighth century until the thirteenth century, the penny was considered the most popular coin in Great Britain. In order to handle smaller amounts, people cut pennies into quarters and halves. There were also gold pennies, each of which was equal to 2 tens of silver coins.
Later, other coin names came into use - guinea, sovereign, crown, and also penny or farthing. Coins began to be made from other metals - copper, tin and a mixture of brass and nickel. In the mid-twentieth century, silver coins were replaced by cupronickel coins.
In English, the word sterling means “pure” and refers to the highest grade of this metal. This is exactly how the name of the monetary unit came about, which in everyday life is simply called the pound or sterling. By the way, the pound sterling is the oldest European unit that is still in use.
The modern monetary system today uses the decimal principle, which was introduced in 1971. The first paper money was issued relatively recently - in 1964. Interestingly, historical and cultural figures are often depicted on banknotes. The only monarch whose portrait confirms the authenticity of the banknotes is Elizabeth II.

The modern currency of Great Britain is known as GBP, which is equal to 100 pence. Banknotes in use are represented by the following denominations: 1, 5, 10, 20, 50. Coins include 1 and 2 pounds, as well as 1, 2, 10, 20, 50 pence. The British call the coin “penny”, 2 pence – twopence (and contrary to all reading rules it is proudly called “tapens”), 3 pence – threepence.

At different times, 1 pound had completely different reverse. If on the obverse we were always greeted by Queen Elizabeth II, then, since 1983, on the reverse side we could see floral themes, animals, bridges, as well as images of the royal coats of arms and shields of Belfast, London, Cardiff and Edinburgh.

But what kind of money was in use before? In 1971, Great Britain switched to a decimal coin system, and the “farting” and its derivatives third farting (third), quarter farting (quarter), half farting (half) were completely removed from circulation.

The initial issue of the silver farthing began under Henry III back in the 13th century, but the weight of such a coin was constantly changing. In the 17th century, under King James I, a copper farthing appeared, the diameter of which was 15 mm. The end of the 17th century was marked by the release of a token, which was equal in value to a farthing and a halfpenny. At the beginning of the 19th century, the “farting” began to be produced again, which was made from silver, gold and bronze.

Coins of England of the 16th century: shilling and floring

The first mention of the shilling dates back to the 16th century during the reign of Henry VIII. The “shilling” coin, more often called teston, was minted from copper, and the top layer was coated with silver.

Since the most prominent parts of the coin immediately appeared when it was used, and this was the king’s nose, the ruler was nicknamed “the old copper nose.” Later, the silver shilling continued to be issued during the reign. During the reigns of George VI and Queen Elizabeth II, the last shilling was issued; minting of such coins ceased in 1971.

However, before the advent of the shilling, there was a floring in circulation, which until the beginning of the 20th century was minted from 500-karat silver. It was subsequently replaced by two shillings.

The appearance of the penny coin

The history of the British penny goes back to the distant 8th century, but the common English penny began to be issued a little later, in the 10th century under King Edgard. Since then, the weight of the coin gradually decreased, and the amount of silver decreased, as a result of which already in the 16th-17th centuries the “penny” coin acquired a small shape and light weight. Money was given a new life by Queen Victoria, who established the minting of bronze coins in the mid-19th century. The modern penny is one hundredth of a pound sterling and is made of copper-plated steel.

It might be useful to read: