Financial chiefs have lost track of £50 billion of notes in circulation says the public spending watchdog, the money is not being used for transactions or in household savings, CTV News reports.
The money is reportedly stashed somewhere but the bank of England simply doesn’t know who has it, where it’s gone or what it’s being used for, the chair of the house of commons public accounts committee (PAC), Meg Hiller said in a statement.
There are currently five public bodies responsible for administering or overseeing Britain’s cash system, including the bank of England, the treasury, the royal mint, the financial conduct authority and the payment systems regulator.
The PAC is concerned about the rise in cash withdrawals, considering the use of cash has been declining in Britain for years.
“We need to be more concerned about where the missing £50 billion is, Hiller said.
However, the Bank of England said it’s simply not its business; “members of the public do not have to explain to the bank why they wish to hold banknotes, a spokesperson for the bank said.
The bank of England estimates around 20 to 24 per cent of the notes in circulation are used for cash transactions, with a further 5 per cent used as household savings.
Little is known about the remainder, which is worth around £50 billion the national audit office stated.
“Possible explanations include holdings overseas for transactions or savings and possibly holdings in the UK of unreported domestic savings or for use in the shadow economy,” it stated.
The number of notes in circulation in Britain reached a record high of 4.4 billion in July with a total value of £76.5 billion ($103 billion) according to a September report by the national audit office (NAO), which monitors government spending. This compares with 1.5 billion notes worth about £24 billion ($32.3 billion) in 2000.
At the same time the volume of cash payments has declined a trend likely to accelerate because of the pandemic, a decade ago cash was used in six out of 10 transactions but last year it was less than three.