British pound sterling or gibraltar pound

You will have no issues spending your British pounds in Gibraltar. You will most likely receive Gibraltar pounds/pence in change. Just make sure to get rid of your Gibraltar pound notes before leaving as most banks and merchants will not accept them in Britain.

The Gibraltar situation is similar to that of Scotland and Northern Ireland where the banks print their own pound notes (Gibraltar is also allowed to mint their own coins). You have no issues with the Scottish and Irish notes as long as you stay in those areas but do get looked at strangely trying to use them in England or Wales.

My last visit to England I got a handful of Gibraltar coins (don't remember exactly where). They look practically identical to the current British coins just with the addition of the word Gibraltar. I was able to spend them without issue in London both at places where I interacted with another person as well as in coin operated devices.

Try to exchange any remaining Gibraltar Government notes you may have into Bank of England notes before you leave. Shops are generally quite willing to do this if you make a purchase if they have them. Gibraltar notes are not accepted in the UK by shops, and banks won't change them (although it is possible to deposit them into a UK bank account).

Should you need more money you can find ATMs that are filled with Bank of England notes, for the convenience of Gibraltar residents coming to the UK. Otherwise they will be mixed or Gibraltar notes only.

Gibraltar coins are not valid in the UK. You may well get away with passing them (apart from the £5 coin), but people can refuse them too.

Not sure what Mark means about using Scotland issued pounds in Great Britain. We were in Scotland last May and come to London with about 200 pounds (not weight) of Scotland bank notes. Spent them all in London without a raised eye brow or single question.

You were lucky to get your Scottish notes accepted - a lot of smaller businesses won't accept them because they aren't familiar with them.

On Scottish bank notes:

Just stating my experience. While I was always able to spend the Scottish notes, the cashiers in England and Wales always looked at them a couple times before accepting them. It is easier to just not have any left to spend when you leave. I know for sure that my bank in the US will not touch them if I want to change them back to USD but they have no issues with English pound notes.

Scottish notes are not difficult to spend even in the south of England, but inexperienced cashiers may ask for reassurance from their supervisor etc. I recall a case where after being told to accept my note he then handed it out to the next customer in change who looked even more bemused.

Northern Ireland notes cause much more trouble although they have the same status..