Households are seeking a safety net in time of global volatility, according to the Bank of England’s chief cashier
UK households have been issued a warning to “hoard physical cash” as Brits scramble to respond amidst economic uncertainty and fear of shortages. According to the Bank of England’s chief cashier, households are seeking a safety net during this period of global volatility.
Victoria Cleland stated on Tuesday that UK households were creating a cash contingency fund, similar to their actions during the Covid and cost of living crises. She noted that the Bank had observed a significant rise in the number of banknotes in circulation in recent months.
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“At a time of uncertainty, at a time of crisis, people do move to cash. They want to make sure they have literally got something under the mattress,” said Ms Cleland. “Even in the UK, there will be times where networks are down and you can only be paying in cash.”
Cleland mentioned that consumers want cash “to be there but they’re not necessarily using it”. Last year, Ron Delnevo, chair of the Payment Choice Alliance, which advocates for the long-term future of cash services, declared it was “completely unacceptable” that some shops were refusing cash.
“The vast majority of the public want cash to be honoured as a payment,” he stated. “These businesses are letting down the public.”
Kate Osborne, the Labour Party MP for Jarrow and Gateshead East, who has signed the early day motion, expressed: “It is a fundamental right that people should be able to use cash as a legal tender.
“When you are trying to budget, particularly if you are on a low income, cash is a simple way of doing it. I understand that many people are not using cash much of the time, but there should be choice for all.
“We are seeing more and more retailers offering card-only payments, and it causes problems in constituencies like mine where we’ve got a high number of people who are digitally excluded or may choose not to do electronic banking.”
The Bank of England has suggested that in the coming years, alternative digital payment methods will likely become increasingly accepted and utilised, reports Birmingham Live.
In 2017, debit cards surpassed cash as the most frequently used payment method in the UK.
