While the economic turmoil affected by the coronovirus epidemic has left some people in Britain counting every penny, the country’s central bank is apparently having trouble keeping track of billions of pounds.
A parliamentary report released on Friday stated that 50 billion pounds (about $ 67 billion) of paper money was “missing” from the country’s cash supply and that the Bank of England “lacked curiosity about it all” .
Bills worth more than £ 70 billion are in circulation in the UK, with the report finding that only a quarter were spent on shops and other purchases. This leaves most of those bills – which are not traceable by design – unaccounted for.
The Public Accounts Committee of Parliament called the Bank of England to investigate, saying in the report that £ 50 billion of cash could be hidden in household savings, which go away on a rainy day, or for more nefarious purposes. Is being used.
“£ 50 billion of sterling notes – or about three quarters of this precious and dwindling supply – is stuck somewhere, but the Bank of England does not know where, who or for whom – and is not very keen , “Said Meg Hillary, MLA for the Hackney South and Shoreditch areas of London and chairman of the committee that produced the report.
The Bank of England took a commendable decision on the issue.
“It is the responsibility of the Bank of England to meet the public demand for banknotes. A spokesman for the central bank said in a statement on Friday, the bank always meets that demand and will continue to do so.
“Members of the public do not have to explain to the bank why they want to keep banknotes. This means that the banknotes are not missing, ”the bank statement said.
The epidemic has led to a decrease in cash payments, but the demand for bills has accelerated in recent years and the epidemic has accelerated that trend, the report said. The value of paper (and polymer) bills in circulation in Britain reached a record level of £ 76.5 billion in July.
A reason Maybe the interest rate, which has been low for years, was cut even more this year to boost the British economy.
Andrew Sentence, senior adviser at Cambridge Econometrics and former member of the Bank of England’s Monetary Policy Committee, said, “With interest rates falling so much, it doesn’t really matter if you keep money in the bank or cash it in . ” The current base rate of 0.1 percent means “many people will have more cash in their wallet than they usually have.”
Nevertheless, the Public Accounts Committee – which examines and spends the economy – is unaffiliated with that explanation and is concerned that a substantial proportion of £ 50 billion has been snatched up and used for illegal activity such as money laundering in the shadow economy Is being done for Whether in Britain or abroad.
“More of us are putting money under the mattress because of Kovid? We have to do a lot of this, ”Ms. Hillary said in an interview on Friday, adding to the gap between the notes Being used in circulation and actually “must be linked to crime.”
The Parliamentary Committee hopes that the investigation conducted by the Bank of England may shed some light, if not where it is being conducted, at least on the factors behind the increase in cash demand.
For its part, the Bank of England stated that the amount of paper money being used for transactions in the UK – around 20 to 25 per cent of all cash in circulation – is roughly in line with other major economies.