The British Currency Before Euro
Great Britain has a rich history of currency that spans several centuries. Before the introduction of the euro, the country had its own national currency, the pound sterling, or simply referred to as the pound. The pound sterling was the official currency of Great Britain and its dependent territories, including the Channel Islands, the Isle of Man, and Gibraltar.
The Pound Sterling: A Brief History
The history of the pound sterling can be traced back to the Anglo-Saxon period. The pound was first used as a unit of currency in England during the early medieval period. It was originally a unit of weight for silver, and its name derives from the Latin word ‘libra’, meaning balance or scales. Over time, the pound became the official currency of England, and it continued to be used as the national currency even after the formation of the United Kingdom in 1707.
Pre-Decimalisation: Pounds, Shillings, and Pence
Before decimalisation, the pound was divided into 20 shillings, and each shilling was divided into 12 pence. This system of currency was known as pounds, shillings, and pence, or simply ‘LSD’. For example, £1 10s 6d would be read as ‘one pound ten shillings and sixpence’. This system was in use for several centuries and was only abolished with the introduction of decimal currency in 1971.
Decimalisation: The Introduction of the New Pound
In 1971, the British government introduced a new system of currency based on the decimal system. The new pound was divided into 100 pence, and it was introduced to simplify the currency system and bring it in line with other countries around the world. The new currency was accompanied by a massive public education campaign, and it was introduced with much fanfare.
Banknotes: The Evolution of British Currency
The history of British banknotes can be traced back to the 17th century, when goldsmiths began issuing notes as a form of payment. The Bank of England was established in 1694, and it began issuing banknotes in 1695. Banknotes have evolved over the centuries, with different designs and denominations reflecting the changing times.
Coins: Designs and Denominations
The history of British coins is equally rich and diverse. The first coins were minted in the 7th century, and they were made of silver. Over time, different designs and denominations were introduced, reflecting the changing political and social landscape of the country.
Sterling Crisis: The Devaluation of 1967
In 1967, the British government was faced with a financial crisis and was forced to devalue the pound. The devaluation was necessary to address a balance of payments crisis, but it had a significant impact on the country’s economy. The devaluation of the pound was one of the most significant events in the history of British currency.
The Gold Standard: The Basis of British Currency
For many years, the pound was linked to the gold standard, which meant that its value was based on the price of gold. The gold standard was introduced in the 19th century, and it remained in place until 1931, when Britain abandoned it in the face of a financial crisis.
Other Currencies Used in Great Britain
Although the pound sterling was the official currency of Great Britain, other currencies were also used in the country over the centuries. For example, during the Middle Ages, the Flemish groat was in circulation, while during the reign of Mary Queen of Scots, the French ecu was used.
The Transition to the Euro: Why Britain Opted Out
When the euro was introduced in 1999, Great Britain opted out of adopting the currency. The decision was largely driven by concerns that the euro would lead to a loss of sovereignty and control over fiscal policy. The decision to opt out of the euro has remained a contentious issue in British politics.
Brexit and the Future of British Currency
With the UK’s decision to leave the European Union, the future of British currency is uncertain. The pound has already experienced significant fluctuations since the Brexit referendum, and it remains to be seen how the currency will fare in the coming years.
Conclusion: The Legacy of the Pound Sterling
The pound sterling has a rich and complex history that reflects the changing political, social, and economic landscape of Great Britain. Although the country has seen significant changes in its currency over the centuries, the pound remains a symbol of British identity and sovereignty. The legacy of the pound sterling will continue to play an important role in shaping the country’s future.
