Experts are baffled about the whereabouts of about £50-billion worth of banknotes which are supposed to be circulating through the UK economy.
A report by the National Audit Office (NAO) has admitted that it knows next to nothing about the cash, which is not being used for transactions or identified as savings held by UK households.
It has said that some may have ended up being stashed overseas, stuffed under mattresses or stocked up for use in the ‘shadow economy’ – of off the books cash transactions.
But there is little reliable information to quantify how much is likely to be held where, the NAO said – and called for a new system to map where the UK’s physical money ends up.
Five public bodies – the Treasury, the Bank of England, the Royal Mint, the Financial Conduct Authority (FCA) and the Payments Systems Regulator (PSR) – play a role in administering or overseeing the cash system.