Shortage of £5 notes attacked
Bank of England governor Mervyn King has criticised the lack of £5 notes made available to consumers.In a Mansion House speech Mr King said Britain's central bank had an "ample supply" of new £5 notes waiting to be used, but suggested that the country's commercial banks were shunning them for cost reasons.He told City bosses that it was "more economical" for banks to stock cash machines with £10 and £20 notes and lamented the fact that few ATMs distributed £5 notes.As a result the Bank of England chief warned that the condition of £5 notes in existing circulation had been affected, with many more notes now "noticeably soiled and scruffy".Mr King revealed that the average lifetime of a £5 note had doubled over the past decade.Revealing his intention to seek discussions with Britain's banks over the issue, he argued: "There is a need for an adequate supply of low denomination notes that can be used for small transactions where cash is the predominant means of payment. "Such mutual convenience is a public good, and may not correspond to the private interest of commercial banks," he added.Mr King indicated that banks might need to be given different incentives to encourage them to accept different denomination notes from the Bank of England.He also suggested that new arrangements could be sought to increase the availability of £5 notes to retailers and to improve the durability of them.Responding to his comments the British Bankers Association (BBA) said that it would be happy to discuss the issue.But BBA chief executive Angela Knight told BBC Radio Five Live that it was "safer" for banks to stock higher denomination notes because the average amount withdrawn from cash machines was £100.
Share this..
Related stories
CBI suggests finance sector job losses on the rise
The CBI has today come out to warn that there will be a significant increase in finance related jobs losses over the coming months. This is an area of industry which has attracted much positive and negative attention over the last few months but it is a sector which seems to be coming under more and more pressure. While many observers will sit back and mock the loss of jobs in the traditionally hi...
Read MoreSimple energy-saving ideas for the home
Over the last 18 months we have seen the subject of energy bills hit the headlines on numerous occasions as the cost of gas and electric in particular continues to rise. It is therefore essential that where possible you look to make energy savings around the home and to be honest there are many easy ways to reduce energy bills.
Even though many of us appreciate that we should switch...
What will happen to the UK economy in early 2010?
Today's announcement that UK base rates will remain at 0.5% for the foreseeable future and a £25 billion increase in the quantitative easing program were pretty much as expected by analysts but nevertheless there is concern about the first quarter of 2010. The quantitative easing program is scheduled to end in February 2010 and many people are wondering exactly how the economy will react when thi...
Read MoreShould taxpayers have more say about where tax income is spent?
If there is one thing we have seen over the last 12 months it is the fact that billions upon billions of taxpayer's money has been spent on the banking sector with many other areas of the economy effectively neglected. It has shown how the government is in total control over how your tax income is spent and how debt can build up in order to fund various investment programmes and rescue packages.
ECB begins to turn down the fiscal stimulus flame
The European Central Bank (ECB) has today begun to turn down the fiscal stimulus flame which has helped the European economy recover over the last few months. There has also been an increase in the forecast rate of economic growth for 2010 which is now expected to be in the region of 0.8%. It also appears that European interest rates will increase in the short to medium term as slowly but surely w...
Read More