The British Pound

The British Pound

The history of the The British Pound.

The Pound Sterling, commonly known as the British Pound, is the oldest and at the same time one of the most important currencies in the world. Colloquially, everyone talks about the British Pound, but many people do not realize that the official name of the currency is Pound sterling. Its symbol is GBP, although £ is also often used. The history of the British Pound began at the end of the 8th century, when the Anglo-Saxon king Offa of Mercia introduced the monetary unit called the Penny. Despite its different name, it was the origin of the British currency that is still used today. The Pound sterling was not officially introduced until 1158 by King Henry II. It was also then that the principle of convertibility to silver was introduced. However, the first one-Pound coins did not appear until 1489. Interestingly, they were made of gold, which resulted from the fact that one Pound of silver weighed 373 grams at that time. Minting coins weighing almost half a kilogram was pointless, so it was decided to use gold ore.

The importance of the Pound in today’s economic world

The Pound is classified as a hard currency, which means that it is easily convertible to other currencies and issued by an economically strong and politically stable country. In addition to the UK, you can also pay in British Pounds in several other countries and territories. These include the British Antarctic Territory, Falkland Islands, Gibraltar, Guernsey, Isle of Man, Jersey, St. Helena, South Georgia and the South Sandwich Islands. Unofficially, it also applies to economically battered Zimbabwe. The British Pound is a currency of great international importance. Although for many years of its history it had to struggle with many perturbations (for example, the attack of George Soros in 1992). Its strength is evidenced by the fact that the United Kingdom never joined the Euro zone, because it had a stable currency itself.

The position of the Pound was also not shaken by the economic and political turmoil associated with Brexit , which suggests that it will remain one of the strongest currencies for the next decades.

What does the Pound strength depend on?

The value of the Pound dependent on a strong industry is a thing of the past. Currently, the main branch of the British economy is the financial and insurance sector. It is in London that decisions are made that have the greatest impact on the exchange rate of the national currency. The situation on the crude oil market is also of great importance. The Pound is one of the most important currencies in the world, changes in each of the other world currencies (US Dollar, Euro and Yen) affect its value.

Pound Sterling today

Great Britain had its reasons not to change the Pound to the common currency while still in the European Union. The Pound exchange rate still maintains its value, even despite Brexit or a pandemic. The GBP exchange rate is affected by the current monetary policy, GDP, but also the level of unemployment in the country. Due to the fact that the Pound is one of the most important currencies in the world, its price may be influenced by the quotations of other big four currencies.