BOE - Printing Even More Money

inspector_monkfish

09:53 21Mar11 - BOE Aims To Double Number Of "Fivers" In Circulation

LONDON--The Bank of England is aiming to double the number of five-pound notes in circulation in the U.K. in 2012 to meet public demand for low-denomination notes to make small purchases, a Bank of England official said Monday.

Victoria Cleland, head of notes division at the central bank, told a conference in Barcelona, Spain, that the central bank expects GBP4 billion of "fivers" to enter circulation in 2012--nearly twice as many as in 2010, according to a text of her remarks.

Cleland said U.K. shoppers have told the bank that good quality five-pound notes are hard to come by. The public currently acquires 40% fewer five-pound notes than they did a decade ago and many are in worse condition than higher-denomination notes, Cleland said. Five-pound notes change hands more frequently but fewer are banked by consumers or retailers.

"We want the public to be confident in their ability to transact in cash efficiently," Cleland said.

The bank has spearheaded an effort to get high street banks to distribute more five-pound notes through cash machines.

Cleland said nearly a third of the overhauls needed so cash machines can handle five-pound notes have been completed, and a further third is on track to finish by the middle of this year.

Also in her speech, Cleland said the Bank of England observed a sharp rise in hoarding of higher-denomination GBP50 notes during the financial crisis, as some members of the public preferred to have their savings in cash.

System

Can't beat a nice crisp bank note, fivers always look like they've been used as bog roll a few times.

Heyman_2

Should be just in time for us to see the £5 pint at our local!

Niksan

Ahh, only a couple of weeks ago I managed to acquire some fivers from a cash point and struck me as odd at the time, now it makes sense.

Thrugelmir

Niksan wrote: »

Ahh, only a couple of weeks ago I managed to acquire some fivers from a cash point and struck me as odd at the time, now it makes sense.

Cash machines are limited to the amount of notes they can hold. Which is why the majority hold £10 notes. Busy machines particularly to last through the whole weekend. Though in "student" areas £5 notes are used in many machines as the average amount withdrawn is lower so the "cash" goes further.

MrEnglish

So is the currency supply expanding in the UK or not?

blueboy43

Thrugelmir wrote: »

Cash machines are limited to the amount of notes they can hold. Which is why the majority hold £10 notes. Busy machines particularly to last through the whole weekend. Though in "student" areas £5 notes are used in many machines as the average amount withdrawn is lower so the "cash" goes further.

This is part of the reason for the shortage of fivers but not the main reason.

It costs the banks more to provide £5 notes than £10 / £20 (as a % of the amount issued, either from dispensers or counters).

The BoE wanted more £5's in circulation, but the high street banks refused unless the BoE paid them compensation to do it through their cash handling centres.

http://news.bbc.co.uk/1/hi/business/6224556.stm

It has taken a bank crash to make banks realise they have a wider responsibility other than gouging every penny out of their customers.

In addition machines can and are replenished in some places over weekends - it justs adds to costs.

kabayiri

I notice that in the article Blueboy links to, Angela Knight cites the average cashpoint withdrawal to be £100.

Is this really true? I guess I'm surprised.
Does this match up with experiences on here?

StevieJ

I rarely draw out more than £50.

the_flying_pig

it is very annoying to pay for something priced at £2 with a £10 note and receive eight pocket-ripping fat pennies as change. happens all too often these days.

so this must be a good thing.

blueboy43

kabayiri wrote: »

I notice that in the article Blueboy links to, Angela Knight cites the average cashpoint withdrawal to be £100.

Is this really true? I guess I'm surprised.
Does this match up with experiences on here?

As the maximum is normally £300, I doubt the mean average is £100.

I think a few years ago, it was £65 (circa 2008).

I rarely take less than £100 from my own account, but rarely more than £20 from the joint a/c