People storing more cash, BoE says

The Bank of England (BoE) reported an increase in the amount of people storing cash as a result of low interest rates and Brexit uncertainty.

The bank’s chief cashier Sarah John said its note circulation remained flat at £70bn, despite governor Mark Carney saying that cash transactions had declined from 60 per cent to around a third of all transactions in recent years.

According to John, the demand for sterling notes has increased overseas since the EU referendum in June 2016, adding that many people are still using cash in a low-interest rate environment to “store value”.

Despite the government leading a transition towards digital payments and away from cash, BoE deputy governor Ben Broadbent said the UK had no intention of going cashless, stating that many parts of the population were still dependent on cash.

The deputy governor stated that access to cash for certain sections of society could be a problem on the horizon.

Furthermore, Carney has discussed the possibility of a central bank digital currency. However, this would take away the anonymity of cashless payments, which could be a problem.

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