Currency is Pound, but they use the word Lira (Türk Liras, TL).
It’s better to change once in Turkey. You can do it at the airports, banks and exchange agencies.
Euros are accepted everywhere.
No limitation to foreign currencies entry in Turkey.
In Istanbul, traveller's checks are accepted just in certain banks and exchange offices, paying a commission. Have always your passport because they don't accept identity cards.

Banks open normally from 9 to 12 and from 13.30 to 17, Monday to Friday, but you can't change after 16.30.
In addition to banks, you'll find many exchange offices (Döviz Bürosu), normally open to 19. Avoid changing in hotels, index are not interesting.
Everywhere you must pay a commission for cash and traveller's checks.
In 2007, 1 Euro = 1,90TL.
Traders and travel agencies accept dollars and Euros.

Credit cards

Main cards, particularly Visa and MasterCard, are generally accepted. Some banks allow withdrawing Turkish pounds with card.

The index is calculated first in dollars and then in Euros, that corresponds to a commission.
You can easily withdraw cash in ATMs. Withdrawal cost roughly 4,57 Euros.
Withdrawal limits by week changes according banks: from 182,94 Euros to 335,399 Euros. YAp Kredi Bank is most advantageous. Better to pay the maximum with your card.

Budget

Life in Turkey is much cheaper than in United Kingdom, but is increasing.
Inflation is important and Pound devaluation constant, after the checkmate of a stability program implanted some years ago.