Data from May 2015 show the Pound Sterling (GBP) as the fourth most traded currency on the FX market, trailing behind the United States Dollar, the Euro and the Japanese Yen.
GBP is the official currency of:
- The United Kingdom
- Isle of Man
- The British Antarctic Territory
- Tristan da Cuncha
- South Georgia and the South Sandwich Islands
The Governor and Company of the Bank of England, commonly referred to as Bank of England, is authorized by the British government to set and enforce monetary policy for the Pound Sterling.
The monetary policy is normally set by a committee, but the committee must follow the orders of Her Majesty’s Treasury (the Exchequer) in situations where it is necessary with regards to the public during extreme economic conditions. Such orders remain in force for 28 days. After 28 days, they must be approved by parliament to remain in force. Her Majesty’s Treasury hold a position that is somewhat similar to the position that in many other countries would be called Ministry of Finance.
GBP is fiat money. The currency is not tied to a gold standard or similar.
The issuing of GBP
|England and Wales||Only the Bank of England is allowed to issue GBP. The Bank of England may issue GBP at its own discretion.|
|Scotland||The Bank of Scotland, the Royal Bank of Scotland and the Clydesdale Bank are allowed to issue GBP, but only in accordance with directions received from the Bank of England.|
|Northern Ireland||The Bank of Ireland, the Northern Bank, the Ulster Bank and the First Trust Bank are allowed to issue GBP, but only in accordance with directions received from the Bank of England.|
- The Pound Sterling is one of the oldest currencies still in use. In its earlies incarnation, it was a commodity currency.
- In Anglo-Saxon England, 1 pound was equal to 1 pound weight of silver, which in turn was equal to 240 silver pennies.
- The ISO-4217 currency code for the pound sterling is GBP.
- The symbol used for the pound sterling is £. This sign can also be used for other currencies called pound, such as the Syrian pound and the Lebanese pound, as well as for currencies named lira, e.g. the Turkish lira.
- Among forex traders, the term sterling is more commonly used for GBP than the term pound, to avoid mix-ups with other currencies named pound. Sterling is abbreviated Ster. or stg.
- 1 pound sterling = 100 pence. (The singular form of pence is penny.)
- The abbreviations GBX and GBp. both stands for pence sterling.
- Forex traders informally refer to the currency pair GBP/USD as cable. This nickname arose when the exchange rate for GBP/USD was sent between Europe and North America via the newly laid transatlantic telegraph cable.
- GBP is one of the four currencies that make up the currency basket employed by the International Monetary Fund (IMF) to calculate the value of IMF:s special drawing rights. The other three currencies are USD, EUR and JPY.