The economy of any country is dependent on its currency, with each country having a unique currency of its own such as Dollars, Pound, Euro, and Dinar. The pound is the fourth most traded currency in the world even today.
Officially, the currency is called the pound sterling. This is done to differentiate other currencies called the pound, such as the Egyptian pound. Within the UK, it is called pound, but formally worldwide, the currency is referred to as sterling or pound sterling.
Quid Versus Pound
The main difference between quid vs. pound lies in its formality. Pound is the official currency of the UK, but it is formally called the pound sterling. People often get confused when it is called a quid. This confusion mainly occurs in individuals who do not belong to the UK. Quid is instead a more casual or slang term for pound.
The term pound originated from the Latin word poundous, which meant weight. The symbol £ also came from the Latin word Libra. The term pound originated in the eighth century, whereas quid originated in the 17th century. The origin of the word quid came from the Royal Mint in Quidhampton, where it was said to refer to money simply as quid. Alternative names for the pound include sterling or nicker. In contrast, quid is already an alternative term for the pound.
Is Quid the Same as a Pound?
The answer to this is, yes. They both refer to the same currency, they are just used in a different context. In a casual conversation, it can be called a quid, whereas, in a formal setting, it would be referred to as a pound.
Like in the USA, bucks are used for dollars. Similarly, quid in the UK is used for the pound. It is important to remember that quid is always used in a singular form. Such as:
- I would settle for 100 quid for this handbag.
- I can only afford to pay 30 quid for this candy.
Now that you have understood the difference between a quid and a pound, let’s understand a brief history of the Pound sterling.
Thirty years ago, when the United Kingdom decided to leave the European Union, the pound sterling suffered one of the worst hits. It was seen that more than 2.5 trillion dollars were wiped from the global equity value after this move was made. The British pound has existed for more than 1,200 years, and it certainly didn’t have a smooth ride. It has frequently been in turmoil.
The first king of England was Athelstan. He was the first person to adopt sterling as the official currency of the UK.
Years of inflation
Back in the 980s, one pound could buy you 15 heads of cattle, whereas, by the 2000s, the pound’s purchasing power fell by a lot.
When England got defeated by France in the battle of the beachy head in 1690, King William III established the bank of England. This was done to continue his war with France, and due to this, almost 1.2 million pounds were raised in just 12 days. All of this was done to rebuild the navy and facilitate war.
This was the first time the UK began defining sterling’s value in gold rather than silver. A price of 4.25 pounds per once was set for gold. This lasted for more than 200 years. After the Napoleonic wars, gold was suspended as a method of cash payment.
Gold became a standard when Germany adopted it for international trade. This led to the idea behind many countries keeping money in terms of gold reserves, and as a result, gold became a valuable asset for many countries.
However, by 1914 the United Kingdom suspended the gold standard to support war efforts during World War I. This resulted in the UK borrowing heavily to support war and cause massive inflation in the country, resulting in the devaluing of the pound sterling. By this time, one pound was equivalent to 4.70 dollars.
This era brought improvement for the pound sterling, all because of Winston Churchill. He got the pound back to a gold standard like the pre-war era. This was when one pound was equivalent to 4.86 dollars.
When World War II happened, this caused a massive drop in the pound’s value and went as low as 4.03 dollars for a pound. But the worst drop came in 1967 when the pound was devalued even more. This led to 2.40 dollars for a pound. As a result, this led to high inflation rates and unemployment in the UK. Because of which the UK had to opt for an International monetary fund loan, and a pound was not equivalent to 1.7 dollars.
This is when things started to look up for the United Kingdom, and the pound was almost at the same rate as the US dollar. However, this didn’t last for too long and by 1992 pound value declined massively by 20%.
Due to the global financial crises, many countries suffered a lot, and the UK was also one of them. Consequently, the pound fell by 30%.
This was a massive turn for the UK, as they voted to leave the European Union. This caused the pound sterling to fall to an all-time low. In 31 years, this is when the UK suffered the most in terms of its currency. The currency market was in total turmoil, and assets such as gold came back in demand. People began investing in gold more, and it increased by 7%.
This was all due to the collapse of the Lehman brothers in 2008, and Britain’s exit from the European exchange mechanism in 1992.
Due to the COVID-19 pandemic, all countries and economies faced high inflation and a massive drop in their GDP growth. But due to the successful COVID-19 vaccine roll out, it helped in bringing total economic activity back in the UK. The pound has performed strongly against the US dollar. It has risen to almost 3.1% since February, which is a three-year high.
Since the Brexit and vaccine combined have given certainty to businesses, and a faster rollout, the GBP to USD trend has only moved upward since March 2020. Financial analysts only claim that the pound sterling is going to elevate in value more and more from here on out.
In conclusion, one of the oldest currencies in the world has its fair share of ups and downs. But just like any other strong country, the UK has managed to keep it at par with the world. From here onward, the pound is only going to rise even more. Things are certainly looking better for it.