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Default numbers are being divided by 100 on leaving cell

Excel 2003 SP2 - Part of Office standard edition
When entering numbers into a new or old worksheet they are automatically
being divided by 100 on leaving the cell. Example I type the number 1 and
it becomes 0.01 If I format the cell for currency then type 20 it becomes
£0.20 However if I type £20 that's how it stays. Is there a simple
explanation?
 
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