British Pound Sterling

• Country: United Kingdom
• Currency: Pound Sterling
• Alias: British Pound sterling
• ISO 427 CODE: GBP/826
• Symbol: £

The British Pound Sterling is among the world’s longest-lived forms of currency. The foundations for the system were the troy pound, a measurement for high-quality silver, and a silver penny known as the “sterling” that represented 1/20th of a shilling, and 1/240th of a pound. After centuries of use at home and in its far-flung colonial empire, the United Kingdom finally abandoned the imperial system of currency in 1971, in favor of a decimal-based system that effectively eliminated the shilling from circulation. Even though the United Kingdom has been a member of the European Union since 1973, it has opted to retain the pound sterling as its national currency rather than convert to the euro.

Background of the Pound Sterling

The United Kingdom’s long history of colonialism has earned it a solid reputation as an international finance expert. In fact, by the early 20th century, Britain’s real estate holdings were so widespread around the world that a popular phrase was coined: “The sun never sets on the British Empire.”

The U.K. developed significant industrial capabilities in the years leading up to WWII. While England sustained moderate damage from German bombardments during the war, much of the country’s manufacturing capabilities were preserved, and industrial output of cars, aircraft and other manufactured goods remained strong even after the war.

During the 1960s the U.K. began to see the potential merits in converting its old, imperial-style currency system of pounds (£), shillings (s) and pence (d) into a new, decimal-based system that would be more compatible with other global currencies. The plan was finally implemented on February 15, 1971 – known as as “D” Day in the United Kingdom – marking the conversion from the old system to the new one.

On the foreign currency exchange market, the British pound sterling is still sometimes referred to as “cable,” a term which dates back the age when trading between New York and London was accomplished via transatlantic undersea cable. The pound sterling is also referred to informally as the “quid.” The £ symbol representing the pound is derivied from a stylized version of the letter L representing the Latin term “libre.”

The pound sterling is divided into 100 pence. Denominations for coins are 1p, 2p, 5p, 10p, 20p, 50p; £1 and £2. Denominations for banknotes are £5, £10, £20 and £50, though there are still some £1 notes in circulation in Scotland. The Channel Islands and Isle of Man have some different coins and banknotes, but they adhere to the overall pound sterling standard.