Storing Special Characters

Hi there.

This may be the wrong forum to inquire in, but I'd be grateful if I could
directed in the right direction if that is the case.

I am currently using Postgresql 9.1.

I have a table in which I want to store shop names. Some of the shop names
contain 'é' and '£'.

The query below works when I run it through pg_admin:

insert into retail(storename) values ('£'::character varying)

However, when I run the same query through pg_query in PHP, I get:

PHP Warning: pg_query(): Query failed: ERROR: invalid byte sequence for
encoding "UTF8": 0xa3

I'd really like to find a solution to getting this code to work through
PHP. My PHP code is correct as it executes other queries (which have
no special characters) without complaint. Do I need to make any alterations
in Postgresql? Is my sql wrong? What is the difference in how its executed
though PgAdmin and PHP?

I've been relentlessly searching google for a solution to no avail.

Many thanks in advance.

R Clarke