Pound sterling

Sterling  (symbol: £; currency code: GBP) is the currency of the United Kingdom and nine of its associated territories and formerly of the Kingdom of England. The pound is the main unit of sterling, In modern usage, the name "pound sterling" is used for both the currency and the British pound. and the word pound is also used to refer to the British currency generally, often qualified in international contexts as the British pound or the pound sterling.

Sterling is the world's oldest currency in continuous use since its inception. In 2022, it was the fourth-most-traded currency in the foreign exchange market, after the United States dollar, the euro, and the Japanese yen. Together with those three currencies and the renminbi, it forms the basket of currencies that calculate the value of IMF special drawing rights. As of late 2022, sterling is also the fourth  most-held reserve currency in global reserves.

The Bank of England is the central bank for sterling, issuing its own banknotes and regulating issuance of banknotes by private banks such as the Bank of Scotland and Clydesdale Bank in Scotland, and Danske Bank in Northern Ireland. Sterling banknotes issued by other jurisdictions are not regulated by the Bank of England; their governments guarantee convertibility at par. Historically, sterling was also used to varying degrees by the colonies and territories of the British Empire.

Names

Etymology

thumb|Penny of [[William the Conqueror|William I, showing the king's head between two stars]]

The basic unit of currency in medieval England was the silver penny or sterling, weighing about of a tower pound. Two hundred and forty of these coins made a "pound of sterlings". This term (shortened to "pound sterling" in later usage) continued to be used in accounting even after the sterling had ceased to circulate. The earliest known instances of the term occur in Orderic Vitalis's 12th-century Historia Ecclesiastica, which makes mention of librae sterilensium.

The origin of the word sterling itself is unclear. It first appears in the 11th and 12th centuries, suggesting that it was coined to describe the new, heavier penny introduced by the Normans. According to the Oxford English Dictionary, the most plausible theory is that it represents Old English *, meaning "coin with a star" (a pair of stars having appeared on certain Norman pennies).

An old theory that the sterling was so named because it was introduced to England by Easterlings, i.e. Hanseatic merchants, is untenable on historical and phonological grounds. the Bank of England has exclusively used the single bar variant since 1975. Historically, a simple capital (in the historic black-letter typeface, <math>\mathfrak{L}</math>) placed before the numerals, or an italic <span style="border:1px solid #ddd; background:#fdfdfd; padding:1px; font-family:serif;">l.</span> after them, was used in newspapers, books and letters. The Royal Mint was still using this style of notation as late as 1939. Use of the letter for pound derives from medieval Latin documents: "L" was the abbreviation for , the Roman pound (weight), which in time became an English unit of weight defined as the tower pound. A "pound sterling" was literally a tower pound (weight) of sterling silver. In the British pre-decimal (duodecimal) currency system, the term £sd (or Lsd) for pounds, shillings and pence referred to the Roman , solidus, and denarius.

Notable style guides recommend that the pound sign be used without any abbreviation or qualification to indicate sterling (e.g., £12,000). The ISO 4217 code "GBP" (e.g., GBP 12,000) may also be seen should disambiguation become necessary.

Currency code

The ISO 4217 currency code for sterling is "GBP", formed from the ISO 3166-1 alpha-2 code for the United Kingdom ("GB") and the first letter of "pound".

In historical sources and some specialist banking uses, the abbreviation stg (in various styles) has been used to indicate sterling. Many stocks on the London Stock Exchange are quoted in penny sterling, using the unofficial code "GBX".

Cable

The exchange rate of sterling against the US dollar is referred to as "cable" in the wholesale foreign exchange markets. The origins of this term are attributed to the fact that from the mid-19th century, the sterling/dollar exchange rate was transmitted via transatlantic cable.

Slang terms <span class="anchor" id="quid (slang)"></span>

Historically almost every British coin had a widely recognised nickname, such as "tanner" for the sixpence and "bob" for the shilling. Since decimalisation these have mostly fallen out of use except as parts of proverbs.

A common slang term for the pound unit is "quid" (singular and plural, except in the common phrase "quids in"). Its origin is unknown: possible derivations include , the name for a number of currency units used in Italy until the 19th century, introduced by Italian immigrants; or from Latin via the common phrase quid pro quo, literally, "what for what", or, figuratively, "An equal exchange or substitution". The term "nicker" (also both singular and plural) may also refer to the pound. Falkland Islands and South Georgia and the South Sandwich Islands; Gibraltar; and Saint Helena, Ascension and Tristan da Cunha) is either sterling or pegged to sterling at par.

The other British Overseas Territories have a local currency that is pegged to the U.S. dollar or the New Zealand dollar. The Sovereign Base Areas of Akrotiri and Dhekelia (in Cyprus) use the euro.

Subdivisions and other units

Decimal coinage

Since decimalisation on Decimal Day in 1971, the pound has been divided into 100 pence (denoted on coinage, until 1981, as "new pence"). The symbol for the penny is "p"; hence an amount such as 50p (£0.50) properly pronounced "fifty pence" is often pronounced "fifty pee" /fɪfti piː/. The old sign d was not reused for the new penny in order to avoid confusion between the two units. A decimal halfpenny (p, worth 1.2 old pennies) was issued until 1984 but was withdrawn due to inflation.