Sterling - Wikipedia

For other uses see Sterling (disambiguation)

Sterling is the currency of the United Kingdom and its dependencies. Currency unit is the pound. Standard ISO abbreviation: GBP. Sign: £ (from Latin libra = pound). £1 = 100 pence (p) (singular penny). Pre-1971 £1 = 20 shillings (s.), 1 shilling = 12 pence (d.).

The penny was originally one 'pennyweight[?]'. A pennyweight is a unit of mass which is the same as 1.555 grams, or 1/240th of a troy pound. So, a penny was literally, as well as monitarily, 1/240th of a troy pound of sterling silver. The weight of this coin was instituted by Charlemagne, and the purity of 92.5% silver (sterling silver) was instituted by Henry II in 1158 with the "Tealby Penny" -- a hammered coin. At this time the standard unit of currency in England was the penny.

The medieval penny would have been the equivalent of around 1s 6d in value in 1915. British government sources suggest that prices have risen over 61 fold since 1914, so a medieval sterling silver penny might be worth around £4.50 today, and a farthing (a quarter penny) would have the value of slightly more than today's pound. Inflation has eroded currency value by that much.

Since carrying around a lot of precious metal was cumbersome, banknotes were issued. Banknotes were originally a claim to an amount of precious metal stored in a vault somewhere. In this way the stored value (usually in gold or silver coins) backing the banknote could transfer ownership in exchange for goods or services. So long as each circulating banknote was backed by the appropriate amount of metal the storage and representation of the stored metal constituted the 100% reserve banking system, and the currency system is one based on specie money[?], which takes the forms of commodity money or representative money because it is backed by something of intrinsic value.

Today banknotes are not backed by any intrinsic value. Circulating banknotes are not backed by any reserve of value, but only on the faith that the paper will be honored when it is offered to pay for goods or services. A £100 note is no harder to produce than a £1 note, so the £100 note does not represent any greater intrinsic value than the £1 note. The currency system we currently use is one based on fiat money.

Sterling banknotes are issued by the Bank of England in England, the Bank of Scotland[?], Royal Bank of Scotland[?], and the Clydesdale Bank[?] in Scotland and by the Bank of Ireland[?], Northern Bank[?] and Ulster Bank[?] in Northern Ireland, also by the Government of the Isle of Man and the States of Jersey and Guernsey.

As of April, 2003 the Bank of England banknotes in circulation are:

5 pound note with George Stephenson or a new one with Elizabeth Fry
10 pound note with Charles Dickens (to be withdrawn, July 2003) or a new one with Charles Darwin
20 pound note with Sir Edward Elgar
50 pound note with John Houblon[?]

All the notes also depict Elizabeth II of the United Kingdom.

Bank of Scotland banknotes in circulation are:

5 pound note featuring a vignette of oil and energy.
10 pound note featuring a vignette of distilling and brewing.
20 pound note featuring a vignette of education and research.
50 pound note featuring a vignette of arts and culture.
100 pound note featuring a vignette of leisure and tourism.

All the notes also depict Sir Walter Scott who was instrumental in retaining the right of Scottish banks to issue their own notes in the 1840s.

Royal Bank of Scotland banknotes in circulation are:

1 pound note featuring Edinburgh Castle.
5 pound note featuring Culzean Castle.
10 pound note featuring Glamis Castle.
20 pound note featuring Brodick Castle.
100 pound note featuring Balmoral Castle.

All the notes also depict Lord Ilay (1682-1761), first governor of the bank.

Clydesdale Bank notes in circulation are:

5 pound note featuring Robert Burns on the front and a vignette of a fieldmouse from Burns' "Ode to a Mouse" on the back.
10 pound note featuring Mary Slessor[?] on the front and a vignette of a map of Calabar and African missionary scenes on the back.
20 pound note featuring Robert the Bruce on the front and a vignette of the Bruce on horseback with the Monymusk Reliquary against a background of Stirling Castle on the back.
50 pound note featuring Adam Smith on the front and a vignette of industry tools against a background of sailing ships on the back.
100 pound note featuring Lord Kelvin on the front and a vignette of Glasgow University on the back.

Also see British coinage.

External link

Bank of England banknote page (http://www.bankofengland.co.uk/banknotes/index.htm)
Committee of Scottish Clearing Bankers home page (http://www.scotbanks.org.uk/index.htm)