About the British Pound
The pound sterling is the currency of the United Kingdom and the oldest currency still in use. It is issued by the Bank of England, and Jersey, Guernsey, the Isle of Man and several overseas territories issue their own pounds at par with it.
Sterling has floated freely since the UK left the European Exchange Rate Mechanism in September 1992. It is one of the most traded currencies in the world, and GBP/USD, known in the market as "cable", is one of the most liquid pairs.
The Bank of England's Monetary Policy Committee sets Bank Rate eight times a year, with a target of 2% inflation. UK inflation and wage data, the Bank's decisions and the government's fiscal plans are what usually move the pound.
Paying in GBP
- Sort code and account number
- A UK account is identified by a 6-digit sort code (the bank and branch) and an 8-digit account number. For payments from abroad, use the IBAN, which starts GB and is 22 characters long and contains both, together with the bank's SWIFT/BIC code.
- Faster Payments
- Most sterling transfers within the UK go through Faster Payments and arrive within seconds, 24 hours a day. The scheme allows up to £1 million per payment, but each bank sets its own, often lower, limit.
- CHAPS and Bacs
- CHAPS is used for high-value or time-critical payments, such as property completions, and settles the same working day at the Bank of England. Bacs handles Direct Debits and payroll and takes three working days.
- Confirmation of Payee
- UK banks check the payee's name against the sort code and account number before a payment is sent, and show the payer whether it matches. Use the account holder's exact name, especially for business accounts.
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