United Kingdom, Pound
The British Pound is the currency of United Kingdom. the most popular United Kingdom Pound exchange rate is the EUR to GBP rate
Sterling is the 4th most traded currency in the foreign exchange market, after the United States dollar, the euro, and the Japanese yen. Together with those 3 currencies it forms the basket of currencies which calculate the value of IMF special drawing rights, with an 11.3% weighting as of 2011 (USD 41.9%, Euro 37.4%, Yen 9.4%). Sterling is also the 3rd most held reserve currency in global reserves (about 4%).
British Pound History
Early Currency in Britain
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With its origins dating back to the year 760, the Pound Sterling was first introduced as the silver penny, which spread across the Anglo-Saxon kingdoms. In 1158, the design was changed and rather than pure silver the new coins were struck from 92.5% silver and became to be known as the Sterling Pound. Silver pennies were the sole coinage used in England until the shilling was introduced in 1487 and the pound in 1489.
Importance of the British Pound
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The British Pound is the oldest currency which is still in use today, as well as one of the most commonly converted currencies. It is also the highest valued among the major currencies. The Falkland Islands, Gibraltar, and Saint Helena are all pegged at par to the GBP.
British Pound Notes and the Gold Standard
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During the American war of independence and 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.The first paper notes were introduced in 1694, with their legal basis being switched from silver to gold. The Bank of England, one of the first central banks in the world, was established in 1695. All Sterling notes were handwritten until 1855, when the bank began to print whole notes. In the early 20th century, more countries began to tie their currencies to gold. A gold standard was created, which allowed conversion between different countries’ currencies and revolutionized trading and the international economy. Great Britain officially adopted the gold standard in 1816, though it had been using the system since 1670. The strength of the Sterling that came with the gold standard led to a period of major economic growth in Britain until 1914.
The British Pound and the Sterling Area
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The British Pound was not only used in Great Britain, but also circulated through the colonies of the British Empire. The countries that used the Pound became to be known as the Sterling Area and the Pound grew to be globally popular. It is held as a reserve currency in many central banks. As the British economy started to decline the US Dollar grew in dominance. In 1940, the Pound was pegged to the US Dollar at a rate of 1 Pound to $4.03 US Dollars and many other countries followed, by pegging their respective currencies. In 1949, the Pound was devalued by 30% and a second devaluation followed in 1967. When the British Pound was decimalized and began to float freely in the market, in 1971, the Sterling Area was terminated.
Following, the British Pound experienced a number of highs and lows-.
- 1976: A sterling crisis arose and the UK turned to the International Monetary Fund for a loan
- 1988: The GBP started to shadow the Deutsche Mark
- 1990: The UK joined the European Exchange Rate Mechanism, though withdrew from it two years later
- 1997: The control of interest rates became the responsibility of the Bank of England
Although the United Kingdom is a member of the European Union, it has yet to adopt the euro as its currency.
Currency Facts
Name: British Pound
Symbol: £ penny: p
Minor Unit:
1/100 = penny
Central Bank Rate: 0.5
Top GBP Conversion: EUR/GBP
Top GBP Chart: EUR/GBP Chart
Inflation: 2%
Nicknames: Pound Sterling, Sterling, Quid, Nicker
Coins:
Freq Used: £1, £2, 1p, 2p, 5p, 10p, 20p, 50p
Banknotes:
Freq Used: £5, £10, £20, £50
Rarely Used: £100
Central Bank:
Bank of England
Website: http://www.bankofengland.co.uk
Users: United Kingdom (UK), England,Northern Ireland, Scotland, Wales, Falkland Islands, Gibraltar, Guernsey, Isle of Man, Jersey, Saint Helena and Ascension, South Georgia and the South Sandwich Islands, Tristan da Cunha
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 | N/A |
| 1974 | £0.735 | 1984 | £0.227 | 1994 | £0.141 | 2004 | £0.109 | 2014 | N/A |
| 1975 | £0.592 | 1985 | £0.214 | 1995 | £0.136 | 2005 | £0.106 | 2015 | N/A |
| 1976 | £0.510 | 1986 | £0.207 | 1996 | £0.133 | 2006 | £0.102 | 2016 | N/A |
| 1977 | £0.439 | 1987 | £0.199 | 1997 | £0.123 | 2007 | £0.0980 | 2017 | N/A |
| 1978 | £0.407 | 1988 | £0.190 | 1998 | £0.125 | 2008 | £0.0943 | 2018 | N/A |
| 1979 | £0.358 | 1989 | £0.176 | 1999 | £0.123 | 2009 | £0.0952 | 2019 | N/A |
| 1980 | £0.303 | 1990 | £0.161 | 2000 | £0.119 | 2010 | £0.0910 | 2020 | N/A |
Reserve
