The Bank of England Museum (3): The early history of banknotes

The first notes were receipts for deposits made in the bank and were made out to the amount deposited.

In 1725 the bank began issuing pre-printed notes in set denominations ranging from £5 to £1000. In 1725 the value of issued notes was £3  million, but by 1795 this had risen to £13 million.

The fabled million pound bank note did actually exist, but was never issued to the public and was only used for internal accounting purposes.

The Bank of England was not the only bank in England issuing notes at this time. As they were promissory notes issued in return for deposits, many banks had their own bank notes.