Hi P - as a picky technical point, if it says 'Sterling' on the note they are legal tender in England and Wales - Northern Ireland and Scottish banks produce their own 'promisary notes' - not 'legal tender' - in pounds sterling.
But for actually spending money, nowhere in the UK is one countries' money not actually accepted for buying stuff..... some retailers as above will display Euro as well as GBP prices and take both currencies and a lot of hotels etc take Euros.
If travelling and shopping oputside the main centres of population, GBP should be used - stops all the blank stares and head scratching...
Just a note - Isle of Man banknotes are also Sterling, but as IoM is outside the UK - honest! - their notes are refused more often than Scottish notes. Same problem for Channel Islands notes. They both have currency 'linked' to the GBP...if your'e bored, GBP info here:
http://en.wikipedia.org/wiki/GBP with a few links to while away the day...