British pound sterling(eng. pound sterling) is the official currency of Great Britain. Bank code is GBP. 1 pound is equal to 100 pence. Banknote denominations in circulation: 50, 20, 10, 5, 2, 1 pounds sterling. Coins: £1, 50, 20, 10, 5, 2p, 1p. The name of the monetary unit comes from the words pondus (Latin for “weight, heaviness”) and sterling (from English for “silver coin”).
Traditionally, the kings and queens of Great Britain are printed on the obverse of the pound, currently Elizabeth II. On the back are prominent Englishmen, on 5 pounds there is an image of Elizabeth Fry (reformer of the prison system in Great Britain), on 10 pounds - Charles Darwin (author of evolutionary theory), on 20 pounds of the old model - Sir Edward Elgar (composer), on the new one - Adam Smith ( father of economics). The first President of the Bank of England, Sir John Houblon, is stamped on the £50 note. Only Elizabeth II is depicted on circulating coins.
The pound sterling has been used since the 12th century. It is believed to have been introduced by Henry II in 1158 and could be exchanged for silver and, from 1816 to 1914, for gold. In the first quarter of the twentieth century, the exchange rate was fixed: one pound gave 4.9 US dollars.
The final abandonment of convertibility into precious metals occurred on September 21, 1931, as a result of the Great Depression. The abandonment of the gold standard led to a 20% devaluation of the pound. In 1946, as a result of the Bretton Woods Agreement, it became freely convertible. A failed attempt to peg the exchange rate to other currencies led to its devaluation by 30% in 1949.
In 1966, Great Britain was forced to introduce restrictions on the conversion and export of currency. At that time, tourists were allowed to take no more than 50 pounds with them; this ban was lifted only in 1970. At the same time, in 1966, the pound was devalued by another 14% to $2.71.
The next crisis occurred in 1976, when the rate dropped to $1.57. At that time, the United Kingdom was granted a loan from the IMF to support the national currency in the amount of 2.3 billion pounds sterling. The lowest historical value was recorded in 1985, when the quote was $1.05.
In 1988, under the government of Margaret Thatcher, an attempt was made to peg the pound to the German mark. But already in 1992 this had to be abandoned: within a matter of days, the British currency was devalued by 25% under pressure from currency speculators. It was from these operations that George Soros' Quantum hedge fund managed to make money.
For the summer of 2011, the pound is quoted in the range of 1.62-64 dollars. The exchange rate of the British pound to the euro is 1.11-15 euros per pound sterling.
The British pound ranks fourth in the world in terms of foreign exchange reserves after the US dollar, euro and Japanese yen. The Bank of England is responsible for issuing currency and conducting monetary policy.
The value of the pound sterling in relation to other currencies ensures the high development of UK industry (the country ranks seventh in the world in terms of gross domestic product).
The British pound is one of the main currencies in the Forex market. The UK maintains high interest rates, which makes the pound attractive for position trades. In addition, British macroeconomic indicators show better data than the euro area as a whole. The price of the pound is seriously influenced by energy prices, as it is usually in a positive correlation with oil prices.
The quotation of the English pound is usually called a cable - in honor of the cable that was laid along the bottom of the Atlantic in order to transmit prices by telegraph from the Old World to the New and back. Traditionally, the so-called reverse quotation is used for the pound, that is, the number of dollars included in one unit of another currency is indicated.
Banks and exchange offices in London post their quotes in the same way as on the Forex market. When traveling there, you can take dollars or euros with you. The best quotes, as a rule, are in money changers in the center. In this case, it is necessary to pay attention that no commission is taken from the operation. On this page you can find out the current exchange rate of the English pound to the ruble and track the dynamics of its changes over the past years. For example, in 2016, the minimum value was observed on December 30, then one pound sterling was worth 73.9 rubles, and the maximum was on January 22, on this day one British pound was valued at 118.4 rubles.
The section also provides a table of cross rates between the pound and the euro, US dollar, Swiss franc and other currencies, which will help determine the value of the British currency relative to the currencies of other countries.
You can transfer a certain amount from one currency to another using a currency converter. In addition, you can use it to find out the cross exchange rate for any date, for example, on January 17, 2015, the euro to pound sterling rate was 1 to 0.73, so to buy 120 euros, you would need 88.05 pounds.
The United Kingdom is strong in tradition. The rules seem unshakable, laws are written as if until the end of time. Therefore, it is not surprising that Great Britain clung to the historical monetary system, different from most states of the twentieth century, to the last. A dozen pence made a shilling, and two dozen shillings made a pound sterling. In reality, the situation was even more complicated, since there were more than a dozen coins with different names, where the largest (guinea) was equal to one thousand eight of the smallest (farthings). It was difficult for lovers of English novels to understand how a grout differs from a sovereign, and why those who went to Great Britain in the late 60s could not bring a sovereign. The inconvenience of the number system created problems for financiers in the markets, which prompted them to change the number. Moreover, countries such as Australia and Canada, having retained the portrait of the Queen of England on the obverse, switched from the pound sterling to the more convenient dollar as a national means of payment. Despite the short period that has passed since "Decimal Day", the catalog of British weather has already gained significant thickness and volume.
British penny
February 1971 thinned out the detachment of monetary units, leaving only the pound sterling and a hundred of its change pence in service. Among the currencies of the leading countries of the capitalist world, the pound sterling was one of the most significant units, so it is not surprising that the smallest coin was not a penny, but a halfpenny. But inflation undermines even the strongest currencies, so the halfpenny can no longer be found in the modern coin series. The penny is the smallest of the UK coins.
The pedigree of the penny must be traced back to monetary units that were brought to the territory of modern Great Britain by Germanic tribes. Historians claim that the forerunner of singing is the monastery, which industriously served as local money in the seventh century. The birth of the penny occurred in the eighth century, and it gradually became a more popular coin than the hermitage, which lasted until the early ninth century. The first penny is silver coin. Only centuries later they began to mint it from copper, and subsequently from bronze.
Since 1985, the penny has been the smallest UK coin. It should be noted that in the period from 1971 to 1981, the word “NEW” was minted next to the denomination name on the coins so that they would not be confused with pre-decimal coins. Of course, the coins were strikingly different in appearance. It is difficult to confuse a pre-reform penny with a diameter of 30.72 millimeters with a new penny that has shrunk one and a half times (20.3 millimeters). The Bank of England considered that a ten-year period was enough for the residents of the United Kingdom to get used to the new money, so since 1982 the word “NEW” has been replaced by the capital value of the denomination (“ONE PENNY”).
Since 1992, coin production has become cheaper, when the monolithic bronze of pennies and two-penny coins was replaced by a copper-plated steel core. In order not to rebuild vending machines that respond to weight, the new generation of coins had to be made thicker.
The design of the reverse is symbolically connected with the number “1”. There is a grating of the fortress gates, topped with a crown. This was exactly the emblem of the first king in the Tudor dynasty, Henry the Seventh. A radical change in the design of the reverse of UK coins occurred in 2008. They decided to leave only the largest denomination unchanged. For the rest, the work of competition winner Matthew Dent was used with an interesting idea where fragments of the Royal Shield were placed on the reverse. And the owner of a coin series from pennies to fifty pence will be able to make an image of this shield from coins.
Two pence
If one is a penny, then all the other denominations are pence. Although our modern language allows the phrase “one penny”, seeing this for a classic is the same as being educated by a good Russian language teacher reading “hare”, “parachute” or “one coffee”. Accordingly, “two pennies” are two coins, one each penny. And if there is one coin, it is already “two pence". The date of birth of the modern version of two pence is February 15, 1971. It was then that the Royal Mint released this coin into circulation, completing the campaign to switch to the decimal system. At first, the material for the blank was bronze, but since 1992 it is a steel coin (93%), covered with copper (7%). Connoisseurs, however, pay attention to the fact of the existence of a bronze coin and later years of issue (in catalogs for this variety the letter “a” is added to the main number ), which was issued to form collection sets, which included coins of the "PROOF" quality.
There are many interesting stories associated with this coin. Let's take a look at the original reverse. What's that feathered crown? It turns out that when the denomination was put into circulation, it was planned to mint the coat of arms of Northern Ireland there. But the late 60s were an extremely turbulent period for Northern Ireland. Belfast is fresh in my mind. Armed clashes occur. Troops have been brought in, but skeptics shake their heads that Northern Ireland will soon leave the United Kingdom. Therefore, at the last moment, a decision was made: on the reverse of the two pence to place a diadem decorated with ostrich feathers - the coat of arms of the Prince of Wales. The decision turned out to be prescient. In 1972, the Northern Ireland government was dissolved and the coat of arms of Northern Ireland was deprived of its official status.
The period of coins with the prefix "NEW" ends in 1981, and only for two pence it was unexpectedly extended until 1983 in a number of catalogs. The fault here is no longer politics, but confusion. In 1983, for the minting of a small part of the circulation, an outdated stamp was mistakenly placed, where instead of the required “TWO” the old “NEW” was displayed. This mistake is greatly appreciated by UK weather collectors, so "NEW PENCE" 1983 are already trading with totals of several thousand pounds sterling.
Let us note the fact that the packaging of two pence in bank packaging is carried out in amounts equal to one pound. But hurry with this packaging to retail outlets. Plans by those who like to upset cashiers by counting change from piggy banks in the UK will be severely overthrown. It turns out that for some denominations the amounts within which they are a means of payment are legally established. For one penny and two pence coins, this amount is only twenty pence. If numismatists divide the periods of pre-reform coins of the USSR by the number of ribbons in the coat of arms of the Soviet state, then for coins of the countries of the Commonwealth of the British Crown the dividing line is a change in the portrait of the ruling monarch. In Great Britain, the portrait has been changed three times so far. Note that the original version was created by Arnold Machin. From 1985 to 1997, Elizabeth II was depicted according to a portrait by Raphael Maklouf, and since 1998, the obverse of the coins has been decorated with a portrait by Ian Rank-Broadley. The obverse is the same for all coins of the Commonwealth of the British Crown, which includes such significant countries as Australia and Canada.
Five pence (UK)
And this is the pioneer of monetary reform, the goal of which was the introduction of the decimal system. It is believed that it replaced the shilling. This makes sense, since both a shilling and the new five pence are the twentieth of a pound. The fivepence coin was introduced into circulation on April 23, 1968. Until 1971, these coins had to saturate circulation and become familiar, so that the abandonment of the shilling would not seem like a national tragedy. Note that the shilling finally left circulation only in 1990. During the “decimal” period, the existence of the five-pence piece managed to change significantly. It originally weighed 5.65 grams and had a diameter of 23.59 millimeters. But as soon as the shilling disappeared, the five pence shrank to eighteen millimeters in diameter and was reduced to three grams and a quarter. Since 2012, copper-nickel for workpieces has given way to nickel-plated steel. Since 2008, the reverse of the five pence has become the central fragment of the overall composition. It is on it that there is a common point where all four coats of arms converge.
Ten pence (UK)
Paired with five pence, coins of this denomination were the vanguard in preparing for the introduction of the decimal system. They also appeared in circulation on April 23, 1968. The ten penny piece, weighing 11.31 grams and with a diameter of 28.5 millimeters, was to take the baton from the florin (two shilling denomination). The florin itself remained in circulation and existed for almost a quarter of a century, until July 1, 1993. From the same moment, ten pence changes in size, becoming noticeably smaller (weight - 6.5 grams and diameter - 24.5 millimeters). Both five and ten pence in the old sizes have been withdrawn from circulation, along with shillings and florins. A gigantic one and a half billion circulation, minted in 1992, was intended to supplant the coins of the previous type. However, there are coins of both types with the date “1992”. Nickel silver, familiar to us from the pre-reform USSR, was a material for blanks until 2012. Since January 2012, dimes have been made from nickel-plated steel. Modern ten pences are similar in size to American quarters.
Twenty pence (UK)
A decade of circulation of the new coins showed the inconvenience of the empty space between the ten and fifty cent denominations. Filling it out is the calling of the new denomination, introduced into circulation on June 9, 1982. Copper-nickel billets differ from other denominations in the form of a higher copper content (84% versus 75%). The coin borrowed its shape from the “fifty kopeck piece” - the same Reuleaux heptagon. This shape is designed to separate it by touch from other denominations (it cannot be confused with a fifty-pence note due to the difference in dimensions).
2008 gave numismatists interesting mix-up. From this year, fragments of the English and Scottish lions are minted on the reverse. But the fact is that on the coins of the previous issue the minting date was located on the reverse, while the new design does not imply this. The date successfully moves to the obverse. But chance intervenes: a small part of the circulation is minted with an old-style stamp. As a result The date is missing on both the reverse and obverse. Experts estimate that the circulation of the mix-ups was less than a quarter of a million. And they all went into circulation. So catching an undated twentypence would be a big hit.
Note that in the “decimal” period there was also a denomination twenty five new pence. But this was the minting of exclusively commemorative coins in 1972, 1977, 1980 and 1981. Since 1982, the task of this denomination was transferred to twenty pence.
Fifty pence (UK)
On October 14, 1969, a fifty-pence coin was introduced into circulation to support the five- and ten-penny denominations. This is the first coin to have the shape of a Reuleaux heptagon. In the mathematical description of this heptagon we can read the following properties: “The sides are not straight, but are curved so that the center of curvature is at the opposite vertex of the coin.” Numismatists explain not so intricately: “The coin does not have a fixed radius from any point, but it has a fixed diameter and a minimum size along the edge of the coin.” The original reverse of the coin featured a portrait of a proudly seated woman with a lion peeking out from behind her. This is Britain - an analogue of the American Lady Liberty and the French Marianne. In fact, this is the only surviving portrait of Britain on a yearly basis after the transition to the decimal system. But the work of Christopher Ironside had to become a thing of the past. Since 2008, according to the design of Matthew Dent, the lower part of the Royal Shield has been minted on the reverse.
One pound sterling
It seemed that the era in which the pound sterling would appear not as a banknote, but as a coin, would never come. But time makes adjustments to everything. Inflation undermined the British pound, and by the early eighties it became clear that it was more profitable to represent this denomination in circulation as a coin. The launch of minting the pound was announced in the summer of 1981. Actually everyday coins appeared on April 21, 1983. The solid denomination differed sharply from pence in its impressive weight (only half a gram was not enough to reach ten) and color (the yellow tint is provided by a quarter of the zinc in the total alloy of the coin). The obverse, as usual, is occupied by a portrait of the queen. Reverse is extremely difficult to describe, since it is not a constant. It changes every year. If in the first year of issue there was a national emblem, then later the reverse featured symbols representing the constituent parts of the United Kingdom. First, flowers were used, then heraldry, then famous bridges, and then the emblems of capitals. However, the plant theme was resumed. According to Matthew Dent, since 2008, the entire Royal Coat of Arms has been placed on the reverse of the pound sterling.
But then 2017 arrived and the Royal Mint transformed the round pound coins into a silver-gold dodecahedron, updating the Queen's portrait and replacing the design on the reverse. New trends are primarily aimed at protecting against counterfeits, of which there are already three percent of the total number of coins of a given denomination in circulation. The updated pound sterling will become the most secure coin in the world. The reverse includes the union of the four parts of the British Empire in the form of four plants on one field. This option became the winner of the competition, and the competition was won by David Pierce, who by that time was only fifteen. “The Mint produces four thousand coins per minute,” the British media broadcast with delight. The old round pound will very soon lose its status as a means of payment and will leave circulation.
Two pounds sterling
The denomination of two pounds found the beginning of a glorious journey in three forms of a commemorative coin. At the same time, two-pound coins with a diameter of 28.4 millimeters and a weight of 15.98 grams were issued from a nickel-brass alloy, 925 silver and 917 gold. Looking at the thistle, it is difficult to understand why this coin is included in the “Sports” category. It turns out this is not a mistake. Before us is not just a symbol of one of the parts of the United Kingdom, but the emblem of the XII Commonwealth Games, which were held in Scotland in 1986.
Researchers observed the circulation of this denomination. Based on the results of their work, they decided to introduce regular coins of the same denomination in addition to commemorative coins. However, the regular version had a significant difference - it became the first representative of the bimetal in the UK. The outer ring is composed of a ternary alloy (76% copper, 20% zinc, and 4% nickel). The inner ring became cupronickel. The coin is heavy - twelve grams with a diameter of 28.4 millimeters. The coin was put into circulation on June 15, 1998. An interesting fact is that coins with the date “1997” came into circulation, on which Elizabeth the Second was portrayed by Raphael Maklouf. Coins from 1998 and later have the Queen's portrait by Iain Rank-Broadley.
The complex design of the reverse was explained by its creator Bruce Rushin as follows: we see a transition from the Iron Age, which symbolizes the outer ring, to the age of the Internet and new technologies. If we look closely, we will see the coordinated work of nineteen gear rings in the center. According to the laws of mechanics, such a device would not be able to function due to an odd number of gears. But this apparently didn’t bother Bruce Rushin at all. Between the gears and the outer ring we see a pattern created by fragments of printed circuit boards.
We can also see five-pound coins in circulation. But they already belong to the “memorable” category, so we will talk about them in the following articles.
Latest auction prices for coins in Russian rubles
| Photo | Description of the coin | G | VG | F | VF | XF | AU | UNC | Proof |
|---|---|---|---|---|---|---|---|---|---|
 
| 1 pound 2016 UK round | - | - | - | - | - | - | - | - |
  
| 1 pound 2016 new UK new (12-point), without sign | - | - | - | - | - | - | - | - |
 
| 2 pounds 2001 UK from 244 to 287 rub. | - | - | - | - | 244 | - | 287 | - |
   
| 2 pounds 1997 UK from 266 to 323 rub. | - | - | - | - | 266 | - | 323 | - |
 
| 2 pounds 1998 UK from 161 to 1,183 rubles. | - | - | - | 203 | 161 | 195 | 373 | 1 183 |
 
| 5 pence 1990 UK new type (small diameter and weight - 18 mm, 3.25 g.) from 17 to 67 rub. | - | - | - | 17 | 67 | - | - | - |
 
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The pound sterling currently remains the oldest currency in Europe that is still in circulation. Now the pound sterling whose history began back in 700. AD continues to be used as the national currency of Great Britain and a number of other lands and countries that have accepted it as a legal means of mutual settlement, or is equalized with local money.
For several centuries, the pound sterling currency has occupied one of the main positions in the world economy. Before, the British pound was used as the basis for the monetary reserves of almost all countries in the world. Even after its primacy has passed, it still remains the third most important currency in any portfolio, both in countries' reserve reserves and in the calculation of special borrowing facilities used by the IMF.
Etymology of name and designation
The British currency has a compound name. Usually only the pound is used, alternatively the British pound can be called, in order to indicate accurately. History dates the year 775 as the year the 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, left the definition for the monetary unit, but divided it into 20 shillings, with each of them weighing 12 pence. Later in history, the prefix sterling returned.
Pence has been used since the advent of proper money in English history and in the modern division of the pound sterling. However, its weight and share most of the time were calculated using the 12-digit system, which resulted in 240 coins in one measure. The now familiar and integral decimal division system became quite problematic in Great Britain only in the second mid-twentieth century.
Like any modern currency, there is a symbol for the pound sterling. To determine amounts calculated in pounds, the symbol ₤ or even its simplified but equivalent version £ is used. The symbol is based on the letter L, which is part of the abbreviation LSD (labra, solidi, denarii). Initially, this is how the division of English monetary units took place according to established rules that have been preserved since the times of the Roman Empire. Libra is a unit of weight.
Otherwise, the English pound sterling is denoted by the letter code GBP (ISO 4217 826), which means Great Britain Pound. Other designations you may sometimes see, such as UKP, are not official. Mostly in the share market and accompanying analyst reports, you can see the designation GBp (GBX), which determines the specified amount in pence.
History of British money
The history of the British pound begins with the formation of the Anglo-Saxons. During the reign of King Joffa of Mercia, the penny was introduced, similar to the denarius previously used in the Roman Empire and all subject lands. Then the measure of weight was the pound established by Charlemagne, which just fit 240 pennies. The distribution of these coins throughout modern England allowed them to gain a foothold both in the pockets of merchants and in history. Later, another name for the penny appeared - sterling.
In medieval England, during the history of trade and economic relations, the standard of coinage silver used to this day was born. Until 1158, coins were made from pure silver, at least as pure as it was possible to remove impurities at that time. However, Henry II, as king, decided to introduce .925 silver as a standard, which contained 7.5% impurities. Until 1816, coins made of .925 silver were in use; they wore out less and were therefore more practical.
Beginning in 1344, silver was exchanged for gold, at least for larger denominations, while the silver value of the penny declined over the same period. The story of the decline in the value of the penny continued further. By 1544, silver coins had ceased to be made from coin silver; it was diluted with two parts of copper. At the same time, the pound sterling coin was equal to the troy pound or, in another representation, 5760 grains. It turns out that in the 16-17 centuries. the value of the full-fledged gold pound sterling grew, albeit intermittently, but its components, shillings and pennies, on the contrary, lost value. As a result, one pound contained up to 60 shillings by weight.
In 1603, the Scottish pound was equated to the British pound, but subsequently the latter fell in value; 12 Scots pounds were already required to replace one English pound. In 1707, the Scottish pounds were abolished, and only British money and its fractional parts were in circulation throughout the island.
We can say that Great Britain was the first in history to introduce the gold standard, although at first it was not official. It so happened that gold was constantly imported into the country by merchants, and silver, on the contrary, was exported in incredible quantities. As a result, at the turn of the 17th and 18th centuries, the value of gold grew rapidly, but it was also necessary to urgently take measures to return part of the silver from abroad in order to cover the deficit.
The date of birth of the progenitor of the modern pound sterling can be considered 1694, when the Bank of England was formed. Just a year later the Bank of Scotland was founded and the two began issuing England's first paper money. Banknotes became legal tender along with gold and silver coins.
Only since 1816 was the gold standard used at the official level, which clearly indicated the correspondence of the pound sterling to a certain amount of gold. At the same time, new sovereign coins were introduced containing 113 grains of gold or 22 carats.
In other countries, the gold standard began to be used throughout the 19th and 20th centuries. The ratio of currencies was carried out in relation to gold and agreements on the exchange of banknotes. At that time, the Latin Monetary Union had already been created, but after much deliberation, Great Britain did not become involved in it and therefore continued to compare its British pound sterling with other European monetary systems through general agreements.
Pound Spread
Following the spread of the influence of the British Empire in the world, an increasing number of pounds began to appear, which were in circulation in the colonies and subject territories. Local money was called, respectively, Cypriot, Australian, New Zealand, Southern Rhodesian, etc. pound and had a rigid peg with the main UK currency - the pound sterling. This is exactly how the so-called sterling zone was formed in history.
Bretton Woods Agreement, the beginning of the rise of the US dollar
In 1940, an agreement was signed between the United States and Great Britain, which introduced a rigid exchange rate with the US dollar. 1₤ was worth 4.03 dollars. This ratio remained in force until the end of the war. It was also enshrined and confirmed by the Bretton Woods Agreement, a key agreement in the modern economic history of the world.
Just 4 years after the end of World War II, the government was forced to reduce the price by as much as 30%, which created a new rate of $2.80 per pound sterling. Only in the 1960s did the prerequisites for a change in the value of the UK currency reappear. It seemed overvalued, and therefore was traded lower on the stock exchanges. At this point, it was decided to introduce stricter control over the state of the national currency. Restrictions were even introduced on the possibility of taking money abroad in the amount of ₤50.
Pound decimal conversion
A tangible blow to the average person was the transition to the decimal system of dividing the pound. Historically, the pound was divided into 20 shillings and each of these was divided into an additional 12 pence. However, throughout the rest of the world, the division of the main monetary unit into 100 (1000) fractional parts has been used for a long time.
The transition was made in 1971. The new fractional to the pound began to be called the new penny to distinguish it from previous similar names.
The changing value of the pound
The British pound began to lose its dominant position in the world starting in the mid-20th century. At this moment, many countries that were previously part of the sterling zone decided to switch to their own money, pegged not only to the pound, but also to the US dollar, and multi-currency baskets were formed to form reserves. The second important factor that influenced the decline in the value of the British currency was, again, British dealers. They independently, through their own efforts, created a powerful springboard for the development of the dollar.
The main blow to the pound came in the 1970s. Another crisis has broken out. The IMF, by its decision, wanted to reduce the exchange rate of the pound against the dollar to the level of 1.5, after which it actually fell to $1.57. The ensuing loan of £2 billion from the IMF pushed the currency further into decline. As a result, by 1985, a record drop to $1.05 per pound sterling note was recorded. Only in the 1990s was it able to gain strength again and reach a rate of $2.
Another attempt to enter the pan-European exchange rate regulation system took place in 1990, when the decision was made to join the EMR. But they only managed to stay in the system for 2 years. Already in 1992, on a day later called “Black Wednesday,” it was decided to leave the exchange rate mechanism. The prerequisite was the state of the state’s economy at that time. It is noteworthy that it was on that day that the world famous George Soros managed to earn $1 billion from the fall of the pound.
At the same moment, a sharp increase in the interest rate from 10% to 15% was announced, which could not but affect the state of the economy and the exchange rate.
To stabilize the exchange rate, a decision was made in 1997 to grant the Bank of England the right to set a fair interest rate in order to maintain inflation at 2%. If there is a deviation from this indicator of more than 1% in any direction, the bank manager must appear before parliament and explain the reasons that led to such a change. It also proposes mechanisms aimed at stabilizing the situation. It is noteworthy that after the Bank of England was vested with such powers, the governor had to speak before parliament only once, in 2007, after inflation increased to 3.1%.
European Union and euro
Being a member of the European Union, Great Britain still remains with its national currency. The pound sterling, whose history began more than a thousand years ago, remains one of the few monetary systems that has not been replaced by a single European currency. The issue of switching to the euro was raised several times, and each time was postponed until later. This approach is based on the peculiarities of the UK economy and the monetary policy of the Bank of England. It has been repeatedly confirmed that the approach to stabilizing the economy and stimulating it differs between England and the rest of the European community.
The key moment was the holding of a referendum on the inclusion of Great Britain in the eurozone. Slightly more than half of the population expressed a strictly negative opinion on this matter, only a third agreed with the introduction of the euro. This is how the pound sterling continues its history. Perhaps one of the significant reasons why the population does not want to lose their usual money is that it is associated with a national treasure. Therefore, they are unlikely to simply abandon it. On top of this, according to the government, the transition to the euro is in no way consistent with strengthening national interests and the domestic economy.
For a long time after the introduction of the euro, it, together with the pound sterling, was considered on equal terms and was even included in foreign exchange portfolios on equal terms; their rates were almost the same in relation to the US dollar. However, after 2006-2007. the story has changed somewhat. The upward change in interest rates caused the pound to strengthen significantly against the euro and then against the US dollar, reaching a 15-year high in April 2007. After the 2008 crisis, the pound rapidly fell from $2.1 to 1.25, almost reaching a historical low.
Banknotes
The Bank of England began issuing pound sterling notes in 1694. The denomination of the banknotes was variable and was indicated at the time the banknote was printed. There were also cases of using a fractional number when indicating the value of banknotes. In addition to this, the Bank of Scotland began issuing banknotes in 1695. Despite the fact that the transition to the British pound was not carried out completely, and Scotland’s own monetary units remained in use, banknotes were still issued only in sterling. In the 1790s, a fixed range of denominations from ₤5 to ₤1000 appeared.
In Ireland, banks began issuing banknotes only in 1825, when the British pound began to circulate freely there. However, the range of denominations was limited and the largest denomination was ₤100.
In order to limit the number of types of banknotes issued, a law was passed according to which, from 1826, the issue of paper money was allowed only to banks located within London and its environs at a distance of no more than 65 miles. After this, already in 1944, the issuance of permits for new banks to issue their own pound sterling banknotes was stopped altogether. Private money, which had a rich range of designs and denominations, existed until the 1920s.
To reduce the number of gold coins, in 1914 it was decided to print banknotes in denominations of 10 shillings and one pound sterling. The decision was made by the Ministry of Finance, and it also implemented the issue. These banknotes existed until 1928, replaced by banknotes of the corresponding denominations of the Bank of England.
Only the Second World War was able to disrupt the process of issuing banknotes in the history of England. There were not unfounded fears that Germany would be able to put into circulation a huge mass of counterfeit pounds sterling, thereby collapsing the country's economy, which was already in a terrible state due to the war and constant bombing. A rather strange and at the same time practical decision was made to cancel the issue of banknotes with denominations above ₤10. For some reason this did not concern the banks of Scotland and Ireland.
In the post-war period and to this day, many series of banknotes have been issued, each of which differed from the previous one to maintain security and prevent the appearance of counterfeits. Banknotes of the “E” and “F” series are currently in circulation. The E series was revised in the early 2000s.
The issue of modern banknotes is carried out not only by the Bank of England, but also by banks in Scotland and Northern Ireland, Crown Lands and British Overseas Territories. Officially, banknotes issued in Scotland or Ireland have equal legal tender throughout the UK. However, in practice this is not followed. So, some small organizations and institutions in England may not accept banknotes printed in Northern Ireland or elsewhere, although they have every right to do so, because in principle, the laws of England very strangely limit the concept of legal tender.
Banknotes issued by different banks may differ from each other, for example, they add their own national motifs or bank identifiers other than the Bank of England.
The value of the pound in the international financial arena
At the moment, the valuation of the British pound against other currencies of the world is determined according to the principles of a floating exchange rate. The value of the pound as a reserve for countries decreased after the Second World War, but today it is second only to the currency systems of the United States and the European Union in the currency baskets of different countries. The main weighing influence on the pound is the inflation indicator, and the Bank of England interest rate is combined with the state of the economy, which is somewhat different from the overall European one. The pound sterling, whose history has been developing for a very long time, constantly remains in the focus of attention of currency dealers, is highly valued all over the world, occupying not the last place among the most expensive money in the world.
Pennies, pence, shillings and pounds - how do they relate to each other?
- Pens is the plural of penny. Now 1 pound sterling = 100 pence. Before 1970-1971, 1 pound = 240 pence, 1 shilling = 12 pence.
- The one penny coin is called a penny. There are no shillings for a long time. There are 100 pence in one pound. There used to be 20 shillings in a pound and 12 pence in a shilling. But when it comes to money, the decimal system has been there for a long time.
- Just not until 1970, but until February 15, 1971. There were 20 shillings in a pound, 12 pence in each shilling, i.e. 1 pound was equal to 240 pence. Since 02/15/1971, shillings have been abolished, and 1 pound = 100 pence (for ease of counting).
- Penny (English penny, plural pence (pence)) is a British small change coin. The name penny (in Old English pennige) shares a root with the German word pfennig.
The old penny was designated d (from the Latin denarius denarius).
The modern penny (since decimalization in 1971) is denoted p.
The penny was first minted in the 8th century by King Gibert of Kent (764) and King Offa of Mercia (757-796), modeled on the silver Frankish denarius (denier) issued ten years earlier. On the obverse of the penny there was a chest-length portrait of the king, and on the reverse there was a cross with decorations.
The weight of a penny was 20-22.5 grains (1.3-1.5 g) of pure silver, the diameter of the coin was about 17 mm, in the 9th century it was about 21 mm.
Under King Edgar of England (957-975), the coinage of the common English penny began.
Pennies were minted in huge quantities (particularly due to the need to pay tribute to the Danes), and they were widely circulated all the way to Rus'. If necessary, the coin was simply cut into pieces, producing half and quarter pennies.
Until the conquest of England by the Normans and for the first time after it, the quality of pennies remained almost unchanged. However, over time, the quality of the coins began to deteriorate (due to damage to the coins and failure of coin masters to comply with the general standard).
A particularly strong deterioration in the quality of pennies occurred during the reign of Henry II and during the time of King Stephen. In 1180, a new type of penny (the so-called short cross penny) with a higher weight and silver content had to be introduced.
For a long time, the penny remained the only coin in England. In the 13th century, new small change coins larger and smaller than a penny were introduced in England: grout (4 pence), halfpenny and farthing (1/4 penny).
By the 14th century, a coherent monetary system had been created in England:
1 pound sterling = 20 shillings (until the 16th century only a monetary unit of account) = 60 groats (120 half-groats) = 240 pence (= 480 halfpennies) = 960 farthings. - 100 pence = 1 pound
when they say penny, they mean 1 pence - Until 1971, the relationships between monetary units were as follows:
1 pound sterling = 20 shillings
1 half-crown = 2.5 shillings
1 florin = 2 shillings
1 shilling = 12 pence
1 grout = 4 pence
1 penny = 4 farthings
- is the currency of Great Britain , 1 f.= 100 pence - bank code - GBP. The obsolete abbreviation UKL is used. Banknotes in denominations of 5, 10, 20, 50, coins of 1, 2, 5, 10, 20, 50, 1/2 were issued. Coins of 1/2, 25 are very rare. pence and 5.
Within the UK, individual territories issue banknotes with their own designs, but there are cases when they refuse to accept them.
There are several origins of the name; some sources believe that it appeared in the 12th century and literally meant the following - lb. An ancient English silver coin was called sterling. 240 coins weighed 1 Tower f. - approximately 350 grams or 1 troy lb. - approximately 373.24 grams. For large buyers used exactly this measure, this is how they checked the weight of the coins - if the weight of 240 coins does not equal 1 f-u ,
the coins were either too worn or counterfeit.
English banknote
The name was finally assigned to the monetary unit in 1694, when the Bank of England issued the first banknotes. Nowadays in English the word f is used to denote money. , in official documents use the full form - GBP, the name common on the exchange sterling.
The first English coin was minted in 1489 as golden north- the most reliable unit in the world even now. Registration of all banknotes issued in 1990-1994. executed according to a single compositional model. The three lowest denominations have two versions; they differ very little from each other - in color tone, images and details.
Banknotes have a complex of modern security measures: a multi-color sign, a metallized diving-type security thread, magnetic protection made by local application of ferromagnetic components to certain areas of the security thread, foil stamping (only on banknotes in 50 ). Since 1999, a new series of banknotes has been put into circulation. This banknote has additional security features against counterfeiting: kinegram and luminescent protection.
On the banknote 5 The main plot is - on the front side - a portrait of Queen Elizabeth II, the England medallion, on the back - a portrait of the scientist George Stephenson, an image of a locomotive and a railway bridge. On the banknote 10 — on the front side there is a portrait of Queen Elizabeth II, the England medallion, on the reverse side there is a portrait of the English writer Charles Dickens and a scene of a game of croquet.
On the banknote 20 1991-93 - on the front side is a portrait of Queen Elizabeth II, the England medallion, on the reverse side is a portrait of the English physicist Michael Faraday and a scene from a lecture at the Royal Union in 1826.
20 sterling sample 1999 - on the front side is a portrait of Queen Elizabeth II - on the reverse side is a portrait of the composer Edward Elgar (1857 - 1934) and a view of the facade of Worcester Cathedral.
On the banknote 50 (issue 1994) - on the front side is a portrait of Queen Elizabeth II, the England medallion, on the reverse side is a portrait of the first president of the central bank of Great Britain, Sir John Houblon, and an image of his house on Triadneedle Street.
The exchange rate is set during trading on the foreign exchange market and constantly fluctuates. In 2007 - is $2.10, which allows this currency to retain the proud title of the most expensive in the world. England is rightfully proud of its currency and being a member of the European Union, the United Kingdom of Great Britain does not want to tie its economy to the Euro currency and in every possible way supports its national currency.
