More UK banknotes stashed, but cash spending down: Bank of England - Metro US

More UK banknotes stashed, but cash spending down: Bank of England

FILE PHOTO: The outbreak of the coronavirus disease (COVID-19), in London

LONDON (Reuters) – Demand for banknotes in Britain has increased since the coronavirus pandemic hit the country, despite a fall in the use of cash after government advice in favour of contactless payments, the Bank of England said on Tuesday.

People might be holding more banknotes than usual to give themselves an emergency stash or because they have had less chance to spend them at places such as pubs and restaurants, the researchers said.

When spending picked up after the lockdown in the spring, the long-running fall in the use of cash gathered more speed as people increasingly used contactless payments and online shopping grew.

Britain’s government has encouraged the use of contactless debit and credit card payments, rather than cash, to reduce the risk of coronavirus infection, and in April banks lifted the maximum transaction size to 45 pounds ($60) from 30 pounds.

However, the BoE said tests showed the risk of COVID-19 infection from cash was low with only 1% of virus levels remaining on paper and polymer notes 24 hours after being applied to them.

Future changes in consumer payment behaviour would depend in part on social-distancing measures, the researchers said.

“However, the barriers to alternative payment adoption may have been permanently broken by Covid. Past cash trends are therefore less likely to accurately predict future trends.”

($1 = 0.7515 pounds)

(Writing by William Schomberg; Editing by David Milliken)

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