By Campaign Agent Edward Bourke
300 million new pound coins have been released into circulation, so you will likely be seeing them more often than you think…especially considering that as of October, the old pound coin will no longer be legal tender. So, what is the ‘futuristic’ new pound coin, and what will the change mean for you.
History of the pound:
The pound has its earliest origins in Ancient Rome. The etymology of the word “pound” is “poundus” latin for “weight”. The £ symbol itself also originates from Ancient Rome - depicting a capital L representing libra - the basic weight unit for the Roman Empire.
The pound was first used as a unit of currency by the Anglo-Saxons in 775AD, equivalent to one pound (in weight) of silver. However, it was not a national currency until 928, when it was adopted by the first King of England, Athelstan. At that time, just one pound could buy you 15 cows.
The value of the sterling remained defined in comparison to silver until 1717 when its value was redefined in terms of gold. The value of gold was set at £4.25 per fine ounce. The gold standard remained until 1914 when it was suspended to support the war effort. It was returned in 1925 by Winston Churchill, then Chancellor of the Exchequer, with a value of £1 worth $4.87.
Sterling again came of the gold standard in 1931, causing a considerable value depression. However, this was remedied in 1934 when the United States devalued the dollar, and the pound rose to a record value of £1 to $5.
Then came the Second World War. This caused another significant drop in the value of the pound. Luckily, however, the government decided to peg the pound’s value to the dollar. Leaving it worth $4.03.
During the economic crisis of the late 1960’s, the Labour government of Prime Minister Harold Wilson decided to devalue the pound by over 14%. Wilson stated in 1967 - “It does not mean that the pound here in Britain, in your pocket or purse or in your bank, has been devalued.” However, this is exactly what the decision meant. No longer would £1 get you $4.03, instead it was equivalent to just $2.40. Later, in 1971, the government of Ted Heath was forced to take out a loan from the IMF due to high inflation and unemployment. This drove the value of the pound to just £1 to $1.20.
The pound had a revival in 1979, when the pound was allowed to float, pushing the value to £1 equal to $2. This revival was continued by Lady Thatcher who decided to abolish the exchange controls and keep the pound out of the European Monetary System. The next slip in the value of the pound was in 1985, due to international intervention to depreciate the dollar. The pound became worth $1.20. The pound was again revived under Lady Thatcher, to become worth at the time she left office, roughly $1.80. This did not last, however, just under 2 years after leaving office, the British government chose to leave the Exchange Rate Mechanism causing the pound’s value to slip by more than 20%. Leaving it worth $1.50.
After recovering again during the dot-com boom, when the bubble burst in 2001 it slipped again by over 20% - worth just $1.40. The pound then experienced a huge revival in the noughties, rising in value to roughly $2.00. Then Lehmann Brothers collapsed and the GFC entered full swing. This caused the pound to fall again by over 20%, dropping in value to $1.40.
The pound then remained fairly stable until 2016, not rising or dropping far below $1.60. In 2016, it suffered a drop to a 33 year low when Britain voted to leave the European Union. The value dropped to $1.33.
Since the triggering of Article 50 in March, the pound has been one of the G10’s best-performing currencies.
The New Pound:
Described by The Royal Mint as “the most secure coin in the world” the futuristic new pound coin is packed with anti-security features and features a sleek new design.
New design- dimensions: Thickness - 2.8mm Weight - 8.75g Diameter - 23.43mm
12-sided: The new pound coin is dodecagonal (has 12 sides) which The Royal Mint describes as “instantly recognisable, even by touch.”
Bimetallic: The new pound coin also features two metals. The outer ring is gold coloured, manufactured with nickel-brass. The inner ring is silver coloured manufactured from a nickel-plated alloy.
Latent image: The back of the coin features an image of a hologram that changes. This changes from the ‘£’ symbol to the number '1' when the coin is viewed from different angles.
Micro-lettering: The new pound also features tiny lettering on the lower inside rim of both sides of the coin.”One pound” on the back of the coin (head side) and the year of production on the front “tails” side.
Milled edges: The new pound coin features milled grooves on alternate sides. Hidden high-security feature: The Royal Mint states that “a high-security feature is built into the coin to protect it from counterfeiting in the future.”
How will the change affect you?
The new pound coin may affect you in some small ways. Business owners have been “informed of the need to prepare for the introduction” and many businesses relying on or including coin operated machines will have updated them, but some may still only accept the old pound coin.
The largest effect that the new coin may have on your day to day life, is the legal tender status of your old pound coins. The Royal Mint advises that - “the legal tender status of the round £1 coin will be withdrawn on 15th October 2017. From this date, shops will no longer accept these coins, but you will still be able to take them to your bank”. They do, however, encourage that you change your pound coins prior to the 15th of October.