The British Pound Sterling, often just called the Pound, is the official currency of the United Kingdom, which includes England, Scotland, Wales, and Northern Ireland. Its currency code is GBP, and its symbol is £. It's one of the oldest currencies in continuous use.
The Bank of England, the UK's central bank, is responsible for issuing and regulating the Pound Sterling. Its headquarters are in London.
Exchange rate regime:Floating
This pair, also known as the "Chunnel," is greatly influenced by economic indicators and political events in both the Eurozone and the UK, such as Brexit-related news and changes in the monetary policies of the European Central Bank and the Bank of England.
T; T+1; T+2
United Kingdom's Monetary Policy
The Bank of England's monetary policy aims to deliver price stability – low inflation – and, subject to that, to support the UK Government’s economic objectives, including those for growth and employment. Price stability is defined by the UK’s inflation target, which the Government sets. The target is 2%, measured by the 12-month increase in the Consumer Prices Index (CPI).
The Bank of England uses several tools to implement its monetary policy, including Bank Rate (or the interest rate it pays to commercial banks that hold money with it), government bond buying and selling, and regulatory requirements for commercial banks.
Key Features of GBP
The Pound Sterling is divided into 100 pence. Coins come in denominations of 1p, 2p, 5p, 10p, 20p, 50p, £1, and £2. Banknotes are issued in £5, £10, £20, and £50.
Pound Sterling banknotes and coins feature notable figures from British history and culture. For instance, Queen Elizabeth II's portrait is on the obverse of every coin, while the reverse side depicts a range of designs.
Financial experts regard the Pound Sterling as one of the world's leading reserve currencies. The UK's well-developed financial markets and institutions, and London's status as a global financial hub, contribute to the Pound's prominence.
However, experts note that developments like Brexit and its implications can introduce uncertainty into the UK's economy and influence the Pound's value. Brexit has raised questions about the future of financial services and trade between the UK and the EU, which could impact the Pound in the longer term.
The Bank of England is responsible for the regulation of the Pound Sterling. It controls the issuance of new notes and coins, sets monetary policy, oversees the UK's financial system to ensure its stability, and acts as the lender of last resort to provide financial institutions with liquidity in times of stress.
The Financial Conduct Authority (FCA) also plays a significant role in financial regulation in the UK, overseeing conduct in retail and wholesale financial markets and the infrastructure that supports those markets.
Key considerations to bear in mind
Payment instructions should contain the beneficiary's IBAN, name, and address.
Payment Processing Time
The time taken for a payment to reach the recipient's bank account can vary. Domestic transfers within the UK are typically processed quickly, while international transfers may take a few business days. Consider the processing time when planning your payment to ensure timely delivery. The iBanFirst Payment Tracker can help you track those payments, and ensure a smooth and efficient payment experience.
Fees and Charges
Banks and financial institutions may apply fees and charges when processing international payments. These fees can vary, so it is advisable to check with your bank to understand the charges associated with your transaction. Check out iBanFirst’s Savings Calculator to estimate how much you could save on your next international payment.
New Year's Day
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St. Patrick’s Day
June Bank Holiday
August Bank Holiday
October Bank Holiday
St. Stephen’s Day
iBanFirst S.A. is duly authorised and regulated by the National Bank of Belgium (under CBE number 0849.872.824) as a payment institution. It is a direct member of the SWIFT network and is certified to make payments throughout the SEPA zone. As a payment institution, iBanFirst S.A. only offers hedging solutions (forward, flexible forward and dynamic forward) connected to underlying payment transactions. iBanFirst S.A. does not offer options or any other financial instruments for investment or speculative purposes.