The monetary system is a device of monetary circulation in the country, which is fixed at the legislative and historical levels. Supervision of the monetary system is carried out by the state power in accordance with the law. Each country has its own historically established currency relations. The British monetary system is the oldest in Europe. The British pound is the oldest currency in existence. The pound sterling was introduced into circulation in the 12th century in England.
History of the British pound
For 8 centuries now, the British monetary system cannot be imagined without the pound sterling. The first mention of the currency can be found in the sources of the 9th century. The word "sterling" itself is translated from German as "coin of the East". The first pounds were cast in silver by German craftsmen invited to work in Britain. It was they who called the coin "pound sterling", that is, a pound of silver. The minting of silver money began in England in the 12th century.
In the 15th century, the gold pound was introduced. BeforeAt the end of the 18th century, a metal currency system operated in the country. By the beginning of the 19th century, gold completely replaced silver, and the British monetary system became monometallic. At this time, it became possible to exchange gold coins for paper notes of the Bank of Britain. The currency was fully backed by gold, and the number of banknotes corresponded to the amount of the precious metal circulating in the country.
In 1914, banknotes appeared, and gold money began to be gradually withdrawn from circulation. The pound became the reserve currency. Now up to 80% of international transactions are made in pounds sterling.
The gold supply system ended during the 1930 crisis. The British pound lost its popularity and was replaced by other currencies. Over the past 30 years, the volume of international settlements in UK money has fallen to 3% of the global volume.
Modern currency of Great Britain
After the transfer of the UK monetary system to the decimal system of measurement, 1 pound sterling became equal to 100 pennies (pence). From 1971 to 1982, small coins already had the inscription: "The new penny." Before that, in the Kingdom, the pound was divided into 20 shillings, which were equal to 240 pence. The inconvenient payment system came to Great Britain during the reign of the Roman Empire.
Today, paper money and coins are used in the Kingdom. Banknotes are printed in denominations of 5, 10, 20 and 50 pounds. Coins are issued in denominations of 1, 2, 5, 10, 20, 50 pence. First two coppersrarely seen in circulation, as is the £5 note.
Pounds sterling is used throughout England, Wales, Northern Ireland and Scotland. The currency can be used in the UK Overseas Territories: Gibr altar, Saint Helena, Ascension and Man, Falkland Islands.
The international designation of the British pound is GBP. The front side of the banknotes depicts the reigning Queen Elizabeth II. Famous personalities are depicted from the inside - writers, scientists, statesmen.
In some regions of Britain, for example in Scotland, the euro is used along with the pound. Some central banks in Northern Ireland and Scotland are printing banknotes with their own designs.
Inflation
The British pound is one of the most stable currencies in the world. The Kingdom is in 5th place in terms of inflation. Over the past 5 years, the national currency has fallen by only 7.22%. The inflation rate in the UK for 2018 was 2.4%. At the same time, the growth of incomes of the population of the country caught up with the rate of inflation. From which we can conclude that the depreciation of money will not make a hole in the pockets of the country's inhabitants.
UK prices
The United Kingdom has the second largest economy in the European Union. A high level of medicine, decent wages, a good standard of living - all this can be found in the UK. The average salary in the country is 2010 euros. But always worth itremember that life on the islands is not at all cheap. Prices in the UK bite hard.
Renting housing (one-room apartment) will cost an average of 605 euros per month. In London, this figure is twice as high. Monthly utility bills for electricity, water, gas and household waste collection average 140 euros. Internet costs €27 and monthly transport costs €68.
British people prefer to buy food in chain supermarkets. They often eat outside the home. Food is expensive. Milk (1 liter) - 1 euro, a dozen eggs - 2 euros, a kilogram of chicken - 5 euros, a loaf of bread - 1.2 euros. An average lunch in a restaurant for 1 person will cost about 20 euros, and a hamburger dish in Britain can be purchased for 6.3 euros. The British spend up to a quarter of their monthly income on entertainment.
Cashless and cash payments
The main payment method in the UK is cashless payment. UK banks annually carry out about 68% of non-cash payments from deposit and credit accounts of citizens. Paper money still accounts for 32% of monetary transactions. Such popularity of banknotes is due to a rare phenomenon for Britain - a commission. Some merchants in outlying areas of the UK may charge a fee for non-cash payments. The seller is obliged to inform the buyer in advance that an additional fee will have to be paid at his establishment by hanging a sign at the entrance.
Banking system
Financial systemThe United Kingdom is divided into 2 parts: the banking system and third-party financial institutions. The last category includes insurance and construction companies.
The banking system is the totality of all monetary institutions in a country that have a license to operate issued by the Central Bank.
The UK banking system includes the following structures:
- national commercial banking institutions and merchant banks;
- foreign banks;
- registration houses.
The Central Bank and its functions
The UK monetary system is regulated by the Central Bank. Formally, the banking sector is separate from the state, but subordinate to the government.
The Bank of Britain performs a number of the following functions:
- Is the bank for all commercial banks. Commercial banks are required to have accounts with the Central Bank.
- Banks of other countries have gold and foreign exchange accounts with the Central Bank of the United Kingdom.
- Government accounts opened at the Bank of England. All tax payments and other budgetary payments go through the Bank.
- The bank regulates interest rates on loans.
The Bank of Britain has fixed mortgage payments. The interest rate on the loan cannot exceed 4.5%.
Pound to ruble exchange rate
The pound, unlike the ruble, is a very stable currency. Its rate in relation to other monetary units changes slightly. Pound sterling - oneof the most expensive currencies in the world. It is 1.3 times the value of the dollar and 1.1 times the value of the European currency.
The rate of the pound sterling against the ruble is currently 85.29 rubles according to the Central Bank of the Russian Federation. For comparison, in 2009 for 1 pound they gave 47 rubles, and in 2010 - 44 rubles. Then the Russian economy began to experience regular crises, and the ruble has been steadily declining against the pound for the past 10 years. The highest rate of the pound was recorded in 2016 - then the cost of the monetary unit was 118.4 rubles. Since April 2018, the pound has been steadily holding the mark above 80 rubles.
