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Have UK consumers lost confidence in the UK banking system?

The Bank of England today confirmed that demand for £50 notes in the UK has risen significantly since the recession began, with the number in circulation rising from a value of £7 billion up to £9 billion. It is believed that the troubles within the UK banking sector have prompted more and more consumers to "hoard" cash rather than hold it in savings accounts within the UK banking system.

There is no doubt that confidence in the UK banking system has been hit in the short term although the billions upon billions of pounds invested by the UK government are starting to give a return. The problem for many people is the fact that the credit crunch is something which has not happened in recent living memory therefore many people are unsure about the medium to long term implications.

The truth is that if the UK banking system was to collapse in the UK economy and the worldwide economy would be in big trouble. The government cannot afford to allow the banking system to seize up which is why we saw billions upon billions of pounds of taxpayer's money invested into the sector.

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