This Should Surprise No One: Germany Tried to Undermine British Currency in WW2
Apparently, the Nazis were quite successful, too.
A 1945 report in the National Archives suggests Germany began production of the fake notes five years earlier in a bid to undermine sterling.
Notes began to enter neutral countries by D-Day and the Bank of England issued the first of two recalls.
The Nazis produced counterfeit sterling with a face value of £134m in total.
That was the equivalent of 10% of all sterling in circulation.
Although this trade had been falling off in August 1945, according to Sir Edward the only way to restore confidence in the currency would be for the Bank of England to recall all notes with a face value of £5 or more, and print new ones.
That is what happened.
The highest denomination was £5 and remained so until the early 1960s.
“In general it can be said that the German object of destroying confidence abroad in Bank of England notes has been achieved,” Sir Edward wrote.
It doesn’t surprise me at all that the Nazis would have done this as a form of economic warfare. When you’re at war, you’ll use whatever means are at your disposal to undermine your enemies and their ability to fight back.