The Bank of England’s chief cashier said people are looking for a physical safety net
UK residents are hoarding cash as they rush to build a safety net amid economic uncertainty and fears over power and internet outages, according to the Bank of England’s chief cashier. Victoria Cleland said that UK households are building a cash contingency pot similar as they did during Covid.
And she said the bank has noticed a significant increase in the number of banknotes in circulation recently. But she noted that they were not always spending it and rather ‘literally keeping it under the mattress’.
She said: “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.
“Even in the UK, there will be times where networks are down and you can only be paying in cash.” Cleland said that consumers want cash “to be there but they’re not necessarily using it,” reports Birmingham Live.
In April, swathes of Spain and Portugal were hit with a massive power outage which affected online payments. Cash was essential for making purchases as card machines and mobile payments were disabled.
Last year, Ron Delnevo, chair of the Payment Choice Alliance, which campaigns for the long-term future of cash services, said it was “completely unacceptable” that some stores were rejecting cash.
“The vast majority of the public want cash to be honoured as a payment,” he said. “These businesses are letting down the public.”
Kate Osborne, the Labour Party MP for Jarrow and Gateshead East, said: “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.”
However, it is likely that alternative digital payment methods will become ever more widely accepted and used, the Bank of England has said.
In fact, in 2017, debit cards overtook cash as the most frequently used payment method in the UK.
Having physical cash was also advised this week by former MP and member of the Defence Select Committee, Tobias Ellwood who said the likelihood of a ‘grey zone’ attack is a one of the ‘real world scenarios we must seriously consider’.
He urged households to gather seven items in case of power cuts, internet outages and drone attacks.
This includes physical cash, drinking water, iodine tablets, tinned food, candles and a working torch and a battery powered radio.
