The Missing £50 Billion

~ beetleypete

Two days ago, I saw a short news report on the BBC. It stated that a finance committee had discovered that over £50 billion worth ($67 billion) of all banknotes issued in the UK had gone ‘missing’. They are not circulating in the economy, and nobody actually knows what has happened to them.

On top of that, the Royal Mint is to cease making any more 20p or £2 coins for the next ten years, claiming ‘lack of demand for coins and cash’ as the reason. Some reports suggested that this was yet another slide into a ‘cashless society’, but considering that £50 billion of all banknotes is a signifcantly high percentage of all the notes available, (75% no less) I for one think there should be some sort of serious investigation.

And for readers in Europe or the USA, it seems you have similar problems with the Euro and the Dollar. For anyone else who thinks this is very strange indeed, here are some of the details from that BBC report.

The Bank of England should be trying to track down £50bn of “missing” UK currency, a committee of MPs has said.
The figure amounts to about three-quarters of all UK banknotes in existence.
The cash is not used in transactions or held as savings, but may be overseas, tucked away in homes unreported or being used in the “shadow economy”.
The issue was first identified by the National Audit Office (NAO), which highlighted it in September.

Now the Public Accounts Committee has said the Bank should “get a better handle” on the currency.
The committee said there were “implications for public policy and the public purse” if a material proportion of that large volume of banknotes was being used for illegal purposes.

However, the UK is not the only country to face this problem – and other major global currencies could well be more seriously affected.

A Bank of England spokesperson said: “It is the responsibility of the Bank of England to meet public demand for banknotes. The Bank has always met that demand and will continue to do so.

“Members of the public do not have to explain to the Bank why they wish to hold banknotes. This means that banknotes are not missing.”

Ill-gotten gains.

This rising demand is “a trend being seen with other major currencies”, as the committee itself admits.
It particularly affects the dollar and the euro, which are widely held as reserve currencies around the world.
In the case of the dollar, only about 15% of the US currency supply can be accounted for – a significantly lower proportion than for the UK.
Both those currencies are more attractive to criminals because they have higher-denomination notes which make it easier to smuggle or stash ill-gotten gains.
For instance, there are more $100 bills out there than any other denomination of the greenback, with 80% of them estimated to be held outside the US.
As for the euro, the European Central Bank in Frankfurt no longer issues the €500 note because of concerns it could facilitate illegal activities.
However, it remains legal tender, while €100 and €200 notes are still in production.
By contrast, the highest-value note issued by the Bank of England is £50.

Is this interesting to you, or not? You decide.

64 thoughts on “The Missing £50 Billion”

  4. Wow… I was aware some was unaccounted for but never looked into the amount. It brings to mind a conversation I was having with somebody about tracing one single banknote and the blogger’s insistence that the police should have been able to do that (and we’re talking about a good 30 or 40 years ago), while I had major doubts about it (of course, it’s different if the banknote has been marked and traced for some specific reason).
    It is curious that at a time when we think everything we do and anywhere we go can be tracked, so many people and money are going walkabouts…
    Thanks, Pete. A fascinating topic, and I agree it would make for an interesting (or many) story

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  5. I saw this story on BBC World News……kinda sounds like the shortages that seem to always occur here in the US…..there is more wasted and ‘misplaced’ cash in our government than we really know. I am old fashion…I like the feel of cash in my hand….it is like a book…the smell the feel is very appealing to me. chuq

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  8. Food for thought but this Reset keeps coming on to my radar lately…I guess we will or not find out the way forward at some point which is already decided for us I believe…Oh to be a fly on the wall…a use for a fly methinks …

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        1. I understand that, but we all had to survive whatever life threw at us in our youth, whether fear of Atomic War, the 3-day week, or Maggie Thatcher. They will find ways to cope, I’m sure. x

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  11. This is so strange. The only time I’ve seen a €500 note is when a friend of mine pulled one out to pay for the tolls on the Greek National road (€2.30). The girl nearly had a heart attack, she had to call her supervisor. I thought we would get arrested, but he was totally unfazed.

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    1. Some rich people and criminals must have a LOT of cash stashed away somewhere, Marina.
      500 Euros is a very big note. I never understood why they had one that large.
      Best wishes, Pete.

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  12. For what it is worth, I know a man who lost his home in a fire in California this fall. He lost $5000 in cash that was burned. He did not trust banks. If any central bank wants to account for “missing” currency they might redesign and have a callback period for old currency and see what shows up and what doesn’t. Warmest regards, Theo

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  17. I think this is very interesting, Pete. I must admit to having a very small part of that missing amount here in my home. We always end up with some foreign currency post a trip. I am also a minor contributor to the USA and Hungary’s problem with missing cash as well as the Euro-denominated places in Europe. Oh, and also Dubai. Hmm, I think I’ll have to check and see what else I have lurking around.

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  18. This looks like another excuse for doing away with cash. The most annoying shop here which refuses cash is the chemist. I expect the use of cash will die out with our generation and as I only have about 20 years to go ( If I’m lucky) it won’t be very long.
    I don’t bank on my phone. I don’t trust the internet, mainly because our computers have hissy fits and stop working every now and then – or they cease while they are updating.
    The kids call us old fashioned but I don’t want to lose cash. Perhaps this is just normal. Oldies don’t like change.

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    2. I agree with you Julie. I find it very hard to believe that they don’t know where billions of pounds have gone to! Maybe a few missing thousands could be accounted for in some cash kept in homes ( especially those who live in very rural areas ) for emergencies, unexpected expenses etc. But billions unaccounted for? No. If there is billions “missing” they know where most of it is : in vaults of the homes of the super rich, in “private” bank accounts, circulating in the Dark Web etc.

      I would never bank on a mobile phone or tablet! What if it gets lost? Someone would have access to one’s bank details and accounts! Bad bad idea.

      it’s inevitable that physical currency is going to be done away with fairly soon and replaced with “digital credits.” I’d like to think it would result in a fairer, more egalitarian society like what you see in Star Trek, but I doubt it. Make no mistake the elite will still have piles of currency stashed away in their vaults to exchange with each other to buy rare works of art with, gold, buy private islands with etc.

      The rest of us will be allocated UBI “credits” and they will present it as “a fair and just currency for everyone” meaning everyone gets an amount equal to or very little more than universal credit rates.

      But the elite will still be loaded with millions living in luxury mansions.

      Same old story, but a new guise.

      I’m a history nerd ( since I was a child in the 1970s) and history shows it has always been thus.

      P.S It doesn’t take being an “oldie” to be suspicious of the drive to replace cash with digital currencies. Some youngsters ( by this I mean those under 35) have sussed it out too. Unfortunately they often get called “conspiracy theorists” but any reading of The Great Reset lets you know what the plans are.

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        1. Thanks Pete. That Klaus Schawb goes into great detail in his book what the plans are. Much of it is rather sinister and goes beyond digital currencies but plans to create cyborgs and mass surveillance of citizens. It’s all there to read ( I’ve seen many excerpts and read people’s reviews of the book), so it’s weird that some people online think “conspiracy theorists” have invented “The Great Reset.”

          Much of what Schwab sets out won’t be in place by 2030 ( the year of reckoning it seems) but in 100 years much of it could be achieved. Life in 100 years will be very strange indeed. I’m glad I won’t be living then, but if I had a choice of the 2030s or 1930s I’d chose the 1930s, as I’d find the 1930s much more relatable, and I would understand how things are run. I know how to light a coal fire; I’d know how to use the technology of that era such as rotary dial telephones, gramophones, radios, electric cookers; and the public transport system would be easy to use ( buy a ticket off the conductor when you board). And the music was great.

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  19. I often think the shadow economy is overlooked, I don’t mean ill gotten gains, more the cash in hand, tax free type of deal. I have received many a good discount by paying in cash, be it free of VAT or the tradesman not having to declare earnings and thus not paying tax on profit. I considered this to be fairly widespread in the UK given how may people are self employed. It is certainly rife in Poland 🙂

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    1. Yes, the ‘Black Economy’, also called the ‘Gig Economy’ must have accounted for some of this. But with Uber cabs and most food deliveries now being paid for on Apps, I doubt it comes to £50 billion.
      Best wishes, Pete.

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  20. Many people hide their money at home or in a safe deposit box at the bank.

    Before we got the euro, we even had 1,000 DM notes (well, that’s the equivalent of almost 500 euros).

    Many are still withdrawing or collecting large amounts in cash and we have to ask them what they need it for or where it comes from – all for money laundering.
    Bank is no longer fun. 😦

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    1. I am thinking a combination of tax evasion, and criminal activity, Maggie. It sounds like it would have to be a very long novel! 🙂
      (By the way, did you approve of my use of your photo in the current serial? I will get to 1957 in due course.)
      Best wishes, Pete.

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      1. Pete, you are up for the task. As for your current serial, I am trying to catch up from my month-long absence for NaNoWriMo. You know I prefer to read them in one sitting. I will get it read and let you know.

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    2. I bet so Stevie! The plans are to introduce UBI in the form of “digital credits” where everyone gets the same amount. The elite won’t be on that (at least outwardly) of course so they are stashing the cash ready so they stay super rich.

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