Half of UK cash in black market or overseas, says Bank
My friend Gerard McElwee (University of Huddersfield) has done some really fascinating research on the operation of the “illegal” economy in rural areas. Other commentators use a term to describe some of the below the official radar transactions as “embedeness”. This article throws a fascinating side light onto the issue revealing, notwithstanding the growth of cashless payments a significant increase in the cash in the economy, a large chunk of which is not in active circulation. It tells us:
At least half of all UK banknotes in circulation are held overseas or used in the black market, a Bank of England report suggests.
The Bank, which is the main issuer of banknotes in the UK, said only about a quarter of cash in circulation is being used to buy and sell things.
Some is being hoarded, outside of bank accounts.
Much is held for travel money overseas or used illegally in the “shadow economy”, the Bank said.
Banknotes with a value of £62.6bn were estimated to be in circulation at the end of July, according to the latest figures from the Bank.
That is the equivalent of £1,000 for every person in the country.
Recent industry figures showed that the number of cashless payments in the UK had overtaken the use of notes and coins for the first time. Card use, such as contactless payments, and digital transactions using smartphones are on the rise.
Yet, the value of banknotes in circulation has tripled over the last 20 years, according to the Bank’s report.