Fearful UK households are 'hoarding physical cash' in preparation for outages
The Bank of England's chief cashier said people are looking for a physical safety net
UK residents are hoarding cash as they rush to build a safety net amid economic uncertainty and fears over power and internet outages, according to the Bank of England's chief cashier. Victoria Cleland said that UK households are building a cash contingency pot similar as they did during Covid.
And she said the bank has noticed a significant increase in the number of banknotes in circulation recently. But she noted that they were not always spending it and rather 'literally keeping it under the mattress'.
She said: "At a time of uncertainty, at a time of crisis, people do move to cash. They want to make sure they have literally got something under the mattress.
'Even in the UK, there will be times where networks are down and you can only be paying in cash.' Cleland said that consumers want cash 'to be there but they're not necessarily using it," reports Birmingham Live.
In April, swathes of Spain and Portugal were hit with a massive power outage which affected online payments. Cash was essential for making purchases as card machines and mobile payments were disabled.
Join the Daily Record WhatsApp community!
Get the latest news sent straight to your messages by joining our WhatsApp community today.
You'll receive daily updates on breaking news as well as the top headlines across Scotland.
No one will be able to see who is signed up and no one can send messages except the Daily Record team.
All you have to do is click here if you're on mobile, select 'Join Community' and you're in!
If you're on a desktop, simply scan the QR code above with your phone and click 'Join Community'.
We also treat our community members to special offers, promotions, and adverts from us and our partners. If you don't like our community, you can check out any time you like.
To leave our community click on the name at the top of your screen and choose 'exit group'.
If you're curious, you can read our Privacy Notice.
Last year, Ron Delnevo, chair of the Payment Choice Alliance, which campaigns for the long-term future of cash services, said it was 'completely unacceptable' that some stores were rejecting cash.
'The vast majority of the public want cash to be honoured as a payment,' he said. 'These businesses are letting down the public.'
Kate Osborne, the Labour Party MP for Jarrow and Gateshead East, said: 'It is a fundamental right that people should be able to use cash as a legal tender.
"When you are trying to budget, particularly if you are on a low income, cash is a simple way of doing it. I understand that many people are not using cash much of the time, but there should be choice for all.
'We are seeing more and more retailers offering card-only payments, and it causes problems in constituencies like mine where we've got a high number of people who are digitally excluded or may choose not to do electronic banking.'
However, it is likely that alternative digital payment methods will become ever more widely accepted and used, the Bank of England has said.
In fact, in 2017, debit cards overtook cash as the most frequently used payment method in the UK.
Having physical cash was also advised this week by former MP and member of the Defence Select Committee, Tobias Ellwood who said the likelihood of a 'grey zone' attack is a one of the 'real world scenarios we must seriously consider'.
He urged households to gather seven items in case of power cuts, internet outages and drone attacks.
This includes physical cash, drinking water, iodine tablets, tinned food, candles and a working torch and a battery powered radio.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
The Herald Scotland
6 hours ago
- The Herald Scotland
John Watson 'elated' with CBE in King's birthday honours
Mr Watson has focused largely on philanthropic work since selling the family printing firm he had run for several decades to Multi-Color Corporation of Ohio in a multi-million-deal in 2013. By then John Watson and Company, which Mr Watson had run as managing director from the age of 28 and specialised in labelling for the Scotch whisky industry, was the largest printing business in Scotland. Read more: Since retiring Mr Watson has given significant support to a range of causes through his Watson Foundation, including Social Bite, the charity set up by friend Josh Littlejohn to tackle homelessness. The Watson Foundation provided financial backing to the campaign established by The Herald to establish a Covid memorial garden in Pollok Park, which raised nearly £250,000 for the cause. The philanthropist has also supported the Marie Curie Hospice in Glasgow and the restoration of Clyde steamer TS Queen Mary through the foundation. Mr Watson, who remains an influential figure in the Scottish business community, was awarded the CBE just seven months after he received an honorary doctorate from the University of Glasgow for his charitable work and business achievements. He said tonight that he was 'honoured and elated' to receive the CBE, noting that having been awarded the OBE 19 years ago, the latest honour to be bestowed on him 'came as a considerable surprise'.
The Independent
11 hours ago
- The Independent
What is the cost to the economy of Israel's attack on Iran?
If we needed another lesson about the difficulties of managing an economy in a period of nerve-wracking uncertainty, Israel's attacks on Iran have provided it. Market reaction to Israeli 200 fighter jets hitting more than 100 targets was swift – and predictable. The oil price shot up, the gold price shot up and share prices tumbled across the world. The FTSE escaped the worst of the damage, largely because of its substantial contingent of natural resource stocks, including the presence of two heavily weighted oil majors in its upper reaches. But it still gave up ground following its record close. Economic institute DIW has warned that higher oil prices resulting from the hostilities will hurt the German economy, Europe's economic engine – and the impact will not be confined there. Britain is in the midst of a moderate inflationary spike, with rates jumping to 3.4 per cent in April (3.5 per cent officially, but the Office for National Statistics got its sums wrong and has decided not to course correct). The jump in prices, created by an oil slick of bill, fare and tax increases in that month, is at least expected to be temporary. But higher fuel prices have the potential to change that by powering up prices, potentially leading to a higher and longer-lasting spike than had been expected. The Bank of England has no control over the international price of oil. However, history tells us it will act to damp down what it describes as the 'second order effects' from pricier oil fuelling inflation. That is a problem for the UK economy – and chancellor Rachel Reeves, while we're at it – because they could really use the helping hand of lower interest rates. Donald Trump's tariffs are hurting exporters and even though there have recently been signs that the trade deal secured by Keir Starmer will take effect soon, the base 'liberation day' 10 per cent levy will still largely apply to British exports. While this still leaves the UK in a relatively favourable position, the impact of the much higher tariffs on those without the (relative) benefits of a Starmer-style deal will still hurt. The US remains the world's biggest economy. Trump's economic vandalism will obviously damage the wider global economy, constricting trade, reducing growth, adding to the crippling uncertainty that many investors are apt to react to by hiding under their beds with pots filled with as much gold as they can afford. Companies can be expected to respond similarly if the hostilities continue: when CEOs hear war drums beating, they are apt to switch their focus from risk taking and investment to cost cutting and cash conservation until the turmoil has passed. In recent days, hopes of more UK interest rate cuts have been rising. The economy's struggles in April, which recorded the sharpest contraction in two years, the fact that inflation is actually lower than the ONS said it was and the marked weakening of the labour market, with unemployment rising, job openings vanishing and wage settlements falling, are food for those calling for looser monetary policy, including your correspondent. Traders had been betting on two more cuts, with the first coming in September. Israel's action, however, could shift the calculus again, certainly if it the immediate rise in oil prices is sustained. The Bank's rate setting Monetary Policy Committee (MPC) is not expected to move when it meets next week but, as ever, the comments in the minutes and the way the vote goes will merit close attention. Swati Dhingra will, as she typically does, take a dovish line. I would expect her to vote for an immediate cut. The big question is whether any of her colleagues on the nine-member MPC will join her. The uncertainty created by the outbreak of yet more hostilities is probably all the reason the majority will need for sitting tight and waiting to see how this plays out, before assessing the impact on inflation and the economy . For the rest of us, by which I mean those of us lucky enough to have savings and investments, the message is, well, sorry to descend into cliche, but keep calm and carry on. That meme, modern cliche and merch marketing tool – even though the faux wartime nostalgia of said merch is completely fake – represents sound advice. The markets are apt to panic when things like this happen. Traders who play an important role in price formation, exhibit herd like behaviour, even though this about the worst possible response. It was ever thus. But that doesn't mean we have to follow suit. Much better to sit tight and hope (pray?) that it blows over soon.
Wales Online
11 hours ago
- Wales Online
Savings account is open to 'almost everyone' and could earn customers a tidy sum
Savings account is open to 'almost everyone' and could earn customers a tidy sum An attractive 5% interest rate is on offer for the initial year The account allows multiple withdrawls without any penalties (Image: PA ) Savers could stand to earn a substantial sum by opening a new account. Financial specialists have highlighted an easy-access account from Chase, touting an attractive 5% interest for the initial year. Such a favourable rate presents an opportunity for savers to acquire considerable returns on their investments. A prospective money saver who chooses to deposit £10,000 in this account and allowing it to sit untouched over the span of a year will accrue £500 in interest. Another advantage of this account lies in its easy-access nature. In order to take advantage of the 5% interest offer, new clients are required to open a current account with Chase. For money-saving tips, sign up to our Money newsletter here Although it is generally better for savers to refrain from touching their funds to maximise growth, the account offers flexibility, allowing multiple withdrawals without any penalties. This aspect may prove crucial for those concerned about the potential need for emergency funds. Article continues below Martin Lewis' MoneySavingExpert team has drawn attention to this appealing offer from the app-based internet bank, reports Birmingham Live. The deal includes an additional bonus of 2.25% for a year, culminating in a total interest rate of 5%. Post this period, the rate will decline to 2.75%, which should prompt customers to contemplate searching for a more competitive rate when the time comes. MoneySavingExpert commented: "Top 5% easy-access savings. Newbies to app-only bank Chase get 5% (2.75% variable + 2.25% fixed 12-month bonus), min 1p, max £3m. "To get it, just open its free current account. "You don't need to switch bank to it, and it only does a soft credit-check, so almost everyone can get it and your credit file isn't marked. Article continues below "Its debit card also gives 1% cashback on UK supermarket and travel spends and it is a top card for overseas use."
