The British pound sterling (GBP) is the currency of the United Kingdom, including the British Overseas Territories of South Georgia, the South Sandwich Islands, the British Antarctic Territory, and the Isle of Man and the Channel Islands.
The pound sign (£) represents the British pound sterling, sometimes known as “terl” or” “quid.”
The British pound faces competition from the USD, EUR, and JPY in daily trading volume. The most prevalent currency pairings for the British pound are the euro (EUR/GBP) and the U.S. dollar (GBP/USD). Foreign currency dealers may refer to GBP/USD as cable.
Sterling pennies are 1/100th of a pound. Many stocks trade in pence, not pounds. Stock markets may use GBX for pence. Accounting and FX settings sometimes use the term “telling” or STG instead of the actual designation of GBP, pound sterling.
Examples of currencies linked to the British pound include the Falkland Islands, Gibraltar, Saint Helena, Jersey, Guernsey, Manx, Scotland, and Northern Ireland.
The British pound sterling (GBP) is the oldest globally operating legal currency.
History of GBP
London adopted the British pound as its currency in 760, but it became the official currency of the United Kingdom in 1707. Before printing, the Bank of England hand-wrote all banknotes until 1855.
The British pound was the currency of Australia, New Zealand, and Canada. Numerous countries pegged their currency to gold in the late 19th and early 20th centuries. The gold standard standardized the value of global currencies. Britain determined the pound’s value using the gold standard before WWI.
The government abandoned the gold standard during World War I, reintroduced it in 1925, and discontinued it during the Great Depression. The U.K. enabled the British pound to float freely in 1971, allowing market forces to decide its value. When most E.U. countries adopted the euro in 2002, the U.K. retained the GBP as its currency.
Laws and British pound sterling (GBP)
In June 2016, British voters voted for Brexit, leaving the European Union. The GBP dropped sharply when the U.K. left the E.U. and fluctuated during trade discussions.
In September 2022, Prime Minister Liz Truss proposed tax cuts, causing the pound sterling to fall anew. The Truss administration wanted to promote U.K. productivity, but investors and currency traders worried that tax cuts would raise inflation and debt. The GBP/USD hit a record low of 1.03 on Sept. 26, 2022.
How can investors trade the British pound sterling (GBP)?
Individuals can trade GBP and other currencies using a forex broker. Forex brokers specialize in forex goods.
What is the difference between GBP and GBX?
GBP stands for the pound sterling, while GBX represents the penny sterling (plural: pence), or 1/100th of a pound. Stock exchanges may use GBX to distinguish between pence and pounds, as many equities are traded in pence.
Does the British pound sterling (GBP) remain a reserve currency?
The British pound was the primary reserve currency for other nations to hold extra cash. The British Empire declined after World War I and II, and the U.S. dollar (USD) became the reserve currency—the euro followed as the world’s reserve currency in the early 21st century. The pound is now fourth in the IMF rankings after the Japanese yen (JPY).
The GBP, or British pound sterling, is the official currency of the U.K. The British pound is the oldest legal tender in the world. Is one of the world’s most significant trading volumes.
- The British pound sterling (GBP) is the official currency of the U.K.
- The pound “ign (£) and “n”ckna”e “sterling” or “quid” represent the British pound sterling.
- The British pound is often traded against the euro (EUR/GBP) and the U.S. dollar.