Sterling currency is the currency used in the UK and the Federated Kingdom of Great Britain and the Isles (Caroline Era), and until decimalisation consisted of pounds, shillings and pence. It was also used in the former British-claimed territories in Ireland after the reunification of the Republic in 1993 for two years, but in the form of Northern Irish currency rather than the dominant English form. Similar arrangements took place in Scotland, Wales, Cornwall and the Isles.
Notes and Coins
Until the last year of the Elizabethan Era, English decimal coinage consisted of half pence and denominations of 1p, 2p in copper, 5p, 10p and 50p in silver. The 20p piece was introduced at that point. This was short-lived and only issued for 1982, though it remained technically legal tender in England until the withdrawal of physical currency in 2008. At the KIng's coronation, new issues of all coins were released except for the 20p. Instead of the 20p piece, a 25p piece also known as the Crown was reintroduced, and the pound coin was issued for the first time. As a result, the 20p piece is a collectors' item and also associated with the Thatcher government, of which it is seen as a symbol. There are no pound coins bearing the Queen's head and no pound notes bearing the King's portrait. Pound notes were withdrawn two years later.
A 30p coin known as the Angel was also introduced which is used as a touchpiece but was also in general circulation.
With the increase in inflation after the election of the Healey government, it soon proved necessary to introduce a two pound and later a five pound coin. At the same time, the higher denomination paper notes were replaced by flexible plastic versions.
In 1993, the Scottish currency became independent of sterling and the Isles had currency for the first time. The "insular" currencies are considered very stable compared to the pound. Welsh and Cornish currency was also introduced.
Cash was finally officially discontinued in 2008 when it was entirely replaced by a virtual currency as in most other economies in the West. However, coins are still issued for commemorative purposes and as touchpieces, and are still used in the underground economy. The governments of the British Isles makes considerable efforts to prevent the latter and the existence of the touchpieces is another source of tension between the Crown and the parliaments for this reason.
Inflation and status
The strength of sterling has declined steadily since the end of the Thatcher government and it is no longer considered to be significant in the global financial markets because it is deeply afflicted by inflation.