The British pound, also known as the sterling pound, is the official currency of the United Kingdom and all of its territories. It has been used as the official money on international trade for centuries and is one of the “basket of world currencies” that includes the US dollar, the Japanese Yen and the Euro. The official ISO 4217 code for the pound is GBP. It is issued only by the Bank of England. There are several other currencies used around the world that also referred to as a “pound,” but none of them are officially tied to the British sterling pound. The British pound can be split up into 100 smaller denominations known as pence. The singular of pence is a penny, which is not related to the American penny.
The “pound” gets its full name of “sterling pound” from the fact that its original value was determined by the amount of one pound of sterling silver. It was devised when the Anglo-Saxons rule the British mainland, and the pound remained intact when the Anglo-Saxons fell out of power.
The earliest known use of sterling silver as currency can be traced back to the eighth century and King Offa. He had developed a currency system based on a silver penny, which was actually a derivative of the Frankish Empire’s currency system. The currency converter from one silver penny to a pound came from the Carolingian system of currency, which stated that 240 pennies equaled one pound. King Offa used 240 of his silver pennies to adapt the unit of money known as the sterling pound.
When the penny and pound were first introduced, the coins were made with the purest silver that could be found. But in 1158, King Henry II standardized this somewhat random purity system by stating that a sterling pound would always be 92.5 percent pure silver. The rest was filler metal. This was the standard used until the early 1900s when it was changed again.
Sterling silver is the kind of silver used to make a 92.5 percent pure coin. Fine silver is a more valuable sort of coin that is made using 99.9 percent silver. The British found it easier to adhere to the sterling silver criteria, and that is why the sterling silver pound became common.
The Bank of England was officially established in 1694. Almost from its very inception, the Bank of England was issuing paper money along with silver coins.
The value Scottish and Irish pounds are based on the sterling pound, and that has allowed the British Isles to be able to do currency conversions for centuries.
The 5-pound, 10-pound, and 20-pound notes are more commonly used than the 1-pound note.
The symbol for the sterling pound is £. It can appear with one or two lines through it. The central character in the pound symbol is the letter “L.” This letter was used because the Roman word “librae” was used to measure currency in ancient times.
The GBP symbol is sometimes mistakenly replaced with UKP. The GBP stands for “Great Britain Pound,” and the UKP stands for “United Kingdom Pound.” The UKP symbol is incorrect because the United Kingdom includes Ireland and Scotland. Both Ireland and Scotland have their version of the pound currency.
The nicknames used for the sterling pound have been around for centuries. Some of the nicknames refer to specific denominations of the pound, while other nicknames refer directly to the pound itself. Some of the more common sterling pound nicknames are:
The sterling pound is the official currency of England as well as its direct territories. Those territories include:
- British Antarctic Territory
- Falkland Islands
- Isle of Man
- Saint Helena
- Tristan de Cunha
- South Georgia
- South Sandwich Islands
- British Indian Ocean Territories
Other countries that recognize and use the sterling pound include:
- Sierra Leone