Well, it’s that time of year again when post-Christmas wallets are weighed up and paperwork is gathered for the filing of taxes. And so, for British expats in particular, there is no time like the present to become acquainted with the myriad of U.K./U.S. terminological differences that exist within the world of finance. To help you along your way, here are 10 such terms.
1. Barometer stock vs. bellwether stock
In the U.K., the name of a stock that forecasts the direction of an industry, sector, or financial market is called a barometer stock—so named, presumably, because a barometer is, in its most literal sense, an instrument for forecasting the weather. In the U.S., the word bellwether—with its similar meaning—is preferred.
2. Current account vs. checking account
Known more generally as a transactional account, Brits might be used to depositing many of their earnings into what is known as a current account. However, once you move to the United States, the very same type of account is called a checking account. Of course, once you’ve set up your checking account, you’ll probably want to withdraw funds from it every now and then. It might be handy, therefore, to make note of the next difference.
3. Cash machine vs. ATM
This is perhaps one of the more well-known differences, but for the uninitiated British expat, should you ever find yourself desperately in need of a cash dispenser, don’t ask for a cash machine or a hole in the wall. While Americans will likely know what you mean by the former, you’re far more likely to get what you need by simply asking for an ATM (Automated Teller Machine). Once you do locate the ATM, be sure to remember the next entry on the list.
4. Notes vs. bills
Not only are you now dealing with a different currency, but even the name assigned to individual slips of money is different. Those green pieces of paper are no longer called notes, but bills. Actually, this can become immediately confusing when dining in a restaurant. Whereas the British might pay the bill with a cheque, Americans might pay the check with bills.
5. Merchant bank vs. investment bank
What the British refer to as a merchant bank—that is, a bank that, among other things, resells newly issued shares to investors—is referred to in the U.S. as an investment bank.
6. Ordinary share vs. common stock
If you are in a position to elect a board of directors and vote on corporate policy, chances are you are a holder of ordinary share (U.K.). However, in the U.S. this same kind of share is called common stock (not to be confused with preferred stock).
7. Trade union vs. labor union
Without getting into the pros and cons of unionization, for those of you seeking union representation or, indeed, union membership, know that what you have always referred to as a trade union is known in the U.S. as a labor union (note also the U.S. spelling of “labour”).
8. Retail Price Index vs. Consumer Price Index
For those of you with a broader interest in the financial markets and, in particular, the inflation rate, you may be familiar with the U.K.’s Retail Price Index (RPI), which was once the leading indicator of inflation—that is until it was deposed by its American counterpart: the Consumer Price Index (CPI).
9. Bridging loan vs. bridge loan
If ever you choose to negotiate a short-term loan with a view toward long-term financing, it cannot harm you to know this subtle variation in terminology: what the British call a bridging loan, the Americans call a bridge loan.
10. Unit trust vs. mutual fund
Perhaps you’re an investor looking to combine your funds with those of others to invest in stocks or bonds and the like. Whereas such an investment vehicle is known in Britain as a unit trust, American financial experts know it as a mutual fund.