The British pound competes with the U.S. dollar (USD), euro (EUR), and Japanese yen (JPY) in daily volume trading. The most common currency pairs involving the British pound are the euro (EUR/GBP) and the U.S. dollar (GBP/USD). GBP/USD is referred to as cable by foreign exchange traders.1

The penny sterling or pence is 1/100th of a pound. Many stocks are traded in pence rather than in pounds. Stock exchanges may use GBX to indicate pence. Though the official name of GBP is pound sterling, “sterling” or STG may be used more commonly in accounting or foreign exchange (forex) settings.

Currencies pegged to the British pound include the Falkland Islands pound, Gibraltar pound, Saint Helena pound, Jersey pound (JEP), Guernsey pound (GGP), Manx pound, Scotland notes, and Northern Ireland notes.

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In a June 2016 referendum, British voters supported a measure to leave the European Union through a process called Brexit.6 The GBP declined significantly upon the U.K.’s split from the EU, and the value fluctuated in response to trade negotiations. The pound sterling declined again in Sept. 2022 after Prime Minister Liz Truss announced economic policies on tax cuts. Although the…

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The Bottom Line

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The GBP⁠, or British pound sterling, is the official currency of the United Kingdom. The GBP is the oldest currency in the world that is still used as legal tender. Symbolized by the pound sign (£), the GBP has one of the highest trading volumes in the world.

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The British pound became the official currency of the United Kingdom when England and Scotland united to form a single country in 1707, but the pound was used as a form of money in the year 760.3 Until 1855, when printing began, the Bank of England wrote all banknotes by hand. The British pound served as currency in…