1 Sovereign – Isle of Man

In 2022, the Isle of Man's currency situation remained closely aligned with the United Kingdom, operating under a long-standing, stable arrangement. The Manx pound (IMP) is pegged at par with the British pound sterling (GBP), and both currencies circulate interchangeably on the island. This peg is maintained by the Isle of Man Government's Currency Fund, which holds sterling reserves to fully back the local note issue, ensuring confidence and monetary stability. The island's three commercial banks—Lloyds, Barclays, and Isle of Man Bank—continued to issue their own distinctive Manx pound notes, a unique feature of its monetary system.

The year was significantly shaped by broader UK economic policy, particularly the Bank of England's response to rising inflation. As the UK base rate increased throughout 2022, local interest rates on the Isle of Man followed suit, impacting mortgages and savings. Furthermore, the island's government, while fiscally autonomous, had to navigate the economic headwinds affecting the UK, including the cost-of-living crisis and supply chain pressures, which influenced local prices and economic activity.

Looking forward, 2022 reinforced the island's dual monetary identity: deeply integrated with the UK for macroeconomic stability while retaining visible symbols of its self-governance through its own banknotes and coinage. There was no serious discussion of deviating from the sterling peg, as it provides crucial stability for an economy heavily reliant on finance, e-gaming, and tourism. The situation underscored the Isle of Man's pragmatic approach, leveraging its constitutional relationship with the UK to manage currency while focusing its policy efforts on direct fiscal measures to support residents and businesses through a period of global economic uncertainty.