Andrew Bailey, executive director for banking services and chief cashier, possibly needs to get out more from behind his counter at the Bank of England.
In a speech at the Banknote 2009 conference held in Washington over the weekend, Mr Bailey discussed the changing circulation dynamics of cash in the British economy. He noted, in particular, the sudden growth in demand for £50 notes in recent years, as evinced by this chart:
The Bank man said that demand for £50 notes had picked up markedly since the summer of 2007, and risen further in the wake of the failure of Lehman – evidence, in Mr Bailey’s view, that the financial crisis boosted the status of banknotes as a store of value.
But isn’t there a more mundane reason for the rise in demand for high-denomination notes?
Recent years have seen a surge in migrant labour across Europe – in particular from eastern Europe to places like the UK, where skilled, price-competitive tradesmen are able to pick up plenty of work.
How does a Polish builder get his hard-earned cash back to Poland? In piles of £50 notes, of course.
Related link:
Find-Polish-Builders.co.uk