The history between Iceland and the United Kingdom is long, layered, and full of surprises. From early Norse settlements and medieval trade to world wars, naval clashes over fishing rights, and even financial disputes, these two island nations have crossed paths in dramatic and unexpected ways. Iceland and UK history is marked by moments of cooperation, conflict, and everything in between—and in this post, we explore some of the key events that have shaped this complex relationship.
Early Contact – The Viking Age and the Origins of Iceland and UK History
Before there were cosy cafés and colourful corrugated houses, Iceland was an uninhabited rock in the North Atlantic. That didn’t last long. Some of the earliest recorded visitors were Irish monks—known as the Papar—who may have arrived even before the Vikings. They were likely seeking peace and solitude, which, to be fair, Iceland had in spades. They didn’t settle in large numbers, and there’s no solid archaeological evidence of them today, but a few place names still hint at their presence.
The real settlement story kicks off in the late 9th century, when Norse settlers—mainly from Norway—began arriving by longship. But many of these early Icelanders had already spent time in the British Isles, particularly in Scotland and Ireland. Some were second- or third-generation Norse-Gaels: people with one foot in Viking culture and the other in Gaelic life. And they didn’t just bring their swords and sagas. Genetic studies show that a significant number of women who came to Iceland during this period had Gaelic ancestry.
That means Iceland’s population, right from the start, was a mix of Norse and Celtic roots. You’ll find echoes of this in our folklore, in old Icelandic place names, and even in the way some early farms were set up. Some scholars believe that certain storytelling patterns in the sagas were shaped by Celtic oral traditions too. So, while Iceland’s image is often all Vikings and longboats, the real story is a bit more mixed—and more interesting. The people who settled this island were a blend of cultures, sailing from both Scandinavia and the British Isles, looking for a new start at the edge of the known world.
Medieval Ties and Trade – Building Iceland and UK History
For the first few centuries after settlement, Iceland was run in a pretty unusual way—by a patchwork of local chieftains known as goðar. They held regional power and met each year at the Alþingi to settle disputes and pass laws. This system, known as the Commonwealth period or the age of independent chieftains, lasted from around 930 to the mid-1200s.
There was no king, no central government—just a lot of negotiation, power plays, and, eventually, civil war. By the 13th century, rival families were locked in conflict, especially during the violent Sturlung Era. In 1262, hoping to put an end to the chaos, many of the chieftains agreed to come under the rule of the Norwegian king. This deal, called the Old Covenant, meant peace in exchange for giving up Iceland’s independence.
When Norway entered a union with Denmark in the 14th century, Iceland followed—and remained under Danish rule until the 20th century. Even under foreign rule, Iceland’s location and resources kept it on the radar of European traders—especially in England. From the 1300s onward, English merchants started making regular voyages to Iceland, attracted by the country’s plentiful supply of fish. Stockfish, Iceland’s air-dried cod, was hugely popular in Catholic Europe, and English ports like Bristol and Hull became deeply involved in the trade. By the 15th century, the English presence in Iceland was strong enough that they set up seasonal trading stations, with Hafnarfjörður being one of the busiest.
Tension Between English and German Merchants
These English merchants brought textiles, metal tools, salt, and other goods in exchange for dried fish. Many Icelanders saw this trade as vital, especially as Denmark imposed strict controls and high taxes on other imports. The English often paid better prices and brought better quality goods—so their arrival was welcomed in many coastal communities, even if it wasn’t exactly official policy. The Danish crown wasn’t thrilled about it, of course. Nor were the merchants of the Hanseatic League, a powerful trading alliance based in what is now northern Germany.
Tensions between English and Hanseatic traders often flared into conflict, both at sea and in Icelandic harbours. There were even reports of piracy, blockades, and the occasional burned-out warehouse. But beyond the skirmishes and politics, this period saw deepening ties between Iceland and England. Some Icelanders worked on English ships or learned bits of the language. English coins have been found at archaeological sites, and there’s even evidence that English beer and wool made it into everyday Icelandic life. This trade also gave Icelanders more exposure to news, fashion, and ideas from abroad, even as they remained under tight control from Denmark.
So while their relationship was complicated—part friendship, part rivalry—Iceland and England were very much in contact during the late Middle Ages. In a country where the sea has always been a lifeline, these cross-Atlantic connections helped shape life in coastal towns for generations.
John Cochrane’s Iceland Ambitions
During the early 1800s, John Dundas Cochrane, a Scottish adventurer and writer, made a name for himself through dramatic solo journeys, including a famously gruelling walk across Russia. But before that, around 1801–1802, he had a much less successful idea: he attempted to get Iceland under British control.
At the time, Iceland was suffering. As part of the Danish realm, it was heavily affected by the ongoing Napoleonic Wars. Denmark-Norway had aligned with France, and Britain, in turn, enforced a blockade that cut Iceland off from critical supplies. The situation on the island was so bad that famine was looming. There were even suggestions within Britain that humanitarian aid—or direct intervention—might be needed.
Cochrane saw this as an opportunity. In 1801, he proposed to the British government that he should be sent to Iceland as a sort of unofficial envoy or even governor, to establish British protection over the island. He wrote letters claiming that Icelanders would welcome British rule and that such a move would be both strategically useful and morally justified. He argued that it would relieve suffering and bring Iceland into the British sphere during a key moment in the war.
His proposal went nowhere. The British government—understandably cautious about triggering more diplomatic conflict with Denmark at that point—dismissed the idea. Cochrane never made the trip to Iceland, and there’s no evidence that his plan had any real traction beyond some letters and appeals.
Still, the episode shows how Iceland was briefly seen as a strategic asset in the wider power struggle between Britain and Napoleonic Europe. It also fits with Cochrane’s reputation for over-the-top adventurism and self-promotion. Later in life, he walked from Dieppe to Kamchatka, wrote a book about it, and married a Siberian princess—so trying to claim Iceland for Britain was, for him, fairly on-brand.
British Occupation in World War II – A Defining Era in Iceland and UK History
When World War II broke out, Iceland found itself in a familiar position: strategically important, but caught in the middle of much larger powers. Although Iceland had gained sovereignty from Denmark in 1918, it was still in a loose union with the Danish crown. When Germany invaded Denmark in April 1940, that connection was effectively cut off. Suddenly, Iceland was on its own—and very much on the radar of the Allies.
At the time, Britain was worried that Germany might attempt to use Iceland as a base for operations in the North Atlantic. The island’s location made it perfect for controlling shipping routes and U-boat patrols. So, on 10 May 1940, without asking permission, British forces landed in Reykjavík and began what they called a “peaceful occupation.” Iceland’s government wasn’t exactly thrilled, but it chose not to resist. The Icelanders made it clear that they didn’t want to be dragged into the war and expected their sovereignty to be respected.
The British, for their part, promised not to interfere with domestic politics and focused on military operations and infrastructure. In practical terms, the occupation changed life in Iceland significantly. Troops were stationed in towns across the country, airfields were built, and harbours were improved. British forces constructed Reykjavík Airport, which is still in use today for domestic flights. These developments laid the groundwork for future growth, but they also caused major social shifts—some welcome, others more controversial.
UK Hands Over Responsibility to US
In 1941, Britain handed over responsibility for Iceland’s defence to the United States, which was not yet officially in the war. American forces soon outnumbered the British, and their presence had a lasting cultural and economic impact. The war years brought both challenges and opportunities. Prices rose. The job market exploded. Icelanders suddenly had access to new consumer goods, wages, and even swing music.
But there were also tensions. Relationships between foreign soldiers and Icelandic women caused controversy, leading to what was known as the “Ástandið” or “the situation”—a public debate over morality, sovereignty, and gender roles. Despite the complexities, the British occupation—and the broader Allied presence—helped push Iceland further along the road to full independence.
In 1944, while the world was still at war, Iceland officially broke all remaining ties with Denmark and became a republic. So, while the British never came to conquer, their unexpected arrival in 1940 was one of the most transformative moments in modern Icelandic history, and a pivotal point in Iceland and UK history.
Post-War Relations – Rebuilding Iceland and UK History
After the end of World War II, the relationship between Iceland and the United Kingdom didn’t vanish with the soldiers. While the British troops had left, the shared experience of the war—along with the infrastructure left behind—meant that Iceland and the UK remained closely connected. The post-war years saw increased diplomatic cooperation, as both countries became founding members of NATO in 1949.
With Cold War tensions rising, Iceland’s strategic position in the North Atlantic once again made it an important piece of the puzzle, especially when it came to monitoring Soviet activity. While the United States took the lead in military matters, Iceland remained on friendly terms with the UK in matters of defence and international policy. On a cultural level, ties between the countries grew through education, business, and migration.
Many Icelanders travelled to the UK to study, and British music, fashion, and pop culture became staples in Icelandic homes—especially during the 1960s and ’70s. From The Beatles to Bowie, British influence was strong. At the same time, Icelandic exports—particularly seafood—became a major part of the trade relationship. And that’s where things got tricky, sparking a new chapter in Iceland and UK history…
The Cod Wars – Fish, Flags, and Flares
Between the 1950s and 1970s, Iceland and the United Kingdom engaged in a series of tense stand-offs at sea. These weren’t full-blown wars in the traditional sense—no shots were fired—but serious diplomatic and naval conflicts, and they became known as the Cod Wars.
At the heart of the issue was fishing. Iceland depended heavily on its fish stocks, especially cod, which made up a huge portion of its economy. The government began expanding its fishing limits, first from 4 nautical miles to 12, then to 50, and finally to 200 by the mid-1970s. Each time, the UK objected, as British trawlers had long fished in Icelandic waters.
What followed were tense confrontations between Icelandic patrol boats and British fishing vessels, often escorted by Royal Navy ships. There were ramming incidents, net-cutting operations, and the odd collision—all in the cold, grey waters of the North Atlantic.
Iceland saw the expansions as a matter of national survival. Britain, on the other hand, saw them as an attack on its fishing industry. At one point, Iceland even broke diplomatic relations with the UK in 1976, a remarkable move for two NATO allies.
Eventually, Iceland came out on top. The UK backed down, and the 200-mile exclusive fishing zone became internationally recognised. Iceland’s stand was later seen as a major victory for small nations protecting their natural resources, and the Cod Wars played a key role in shaping modern international law on maritime zones.
Despite the tensions, the two countries patched things up fairly quickly. Today, the Cod Wars are mostly remembered with a mix of pride, humour, and the occasional pub debate.
The 2008 Financial Crisis and the Icesave Dispute
While the Cod Wars were tense, the 2008 financial crash brought Iceland–UK relations to one of their lowest points in recent memory.
In the wake of the global financial crisis, Iceland’s banking sector collapsed almost overnight. One of the affected banks, Landsbanki, had been running an online savings scheme called Icesave, which attracted thousands of depositors in the UK and the Netherlands with high interest rates. When the bank failed, British customers couldn’t access their funds, and panic spread quickly.
In response, the British government used anti-terrorism legislation—yes, the same laws used to freeze assets of hostile states—to freeze Landsbanki’s UK assets and stop money from leaving the country. The move shocked Icelanders and deeply offended the Icelandic government and public. It created an immediate diplomatic rift and remains a sore point in national memory.
The dispute dragged on for years. The UK and Netherlands demanded repayment, while Iceland argued that the state shouldn’t be responsible for covering the losses of a private bank, especially when it was overwhelmed by a crisis that no one fully saw coming.
Eventually, after public referendums in Iceland rejected repayment deals, the matter went to the EFTA Court, which ruled in Iceland’s favour in 2013. The decision found that Iceland hadn’t violated European law and didn’t have to reimburse the UK and Netherlands directly. The case helped establish legal precedents for how international financial guarantees are handled—but also left a bit of lingering bitterness.
Still, time has done its work. Iceland has recovered, and relations with the UK have normalised. But the Icesave affair remains a stark reminder of how financial systems are just as entangled as fishing waters—and how fast friends can fall out when money is on the line.
Iceland and the United Kingdom Today – Still Connected
These days, Iceland and the United Kingdom enjoy a strong, mostly drama-free relationship. The occasional fishy disagreement may still pop up in the news, but for the most part, the two nations work together across diplomacy, defence, business, and culture.
Both countries remain members of NATO, and Iceland continues to play an important role in regional security through its airspace and strategic location. The UK has also supported Icelandic interests in various Arctic and North Atlantic forums, and cooperation on environmental and marine issues is growing.
On the economic side, trade between Iceland and the UK continues to thrive. Iceland exports fish, aluminium, and increasingly, green energy know-how. The UK, in turn, is a key source of goods, services, and tourists, especially since direct flights between Reykjavík and several British cities are easy, fast, and popular year-round.
There are also strong cultural links. British television, music, and literature are widely enjoyed in Iceland (you’ll find more than a few Doctor Who and Monty Python fans here). Icelandic artists, designers, and musicians have become regulars in UK venues and galleries. Thousands of Icelanders have studied or lived in Britain, and plenty of Brits have fallen in love with Iceland—sometimes literally—and made it their home.
The relationship remains friendly and cooperative despite Brexit adding a few wrinkles to trade and travel. Iceland and the UK may be two island nations with unique identities, but after over a thousand years of shared stories—from Norse settlers to naval showdowns—they’ve understood each other pretty well.
