United Kingdom: the use of cash grows to keep expenses under control when inflation explodes
Cash payments rose last year for the first time in a decade as concerns about the cost of living crisis pushed Brits to turn to physical currency.
According to a payments market report from UK Finance reported by CityAM , the number of cash transactions increased by 7% year-on-year to reach £6.4 billion in 2022.
“Growing fears about inflation and the rising cost of living have led some people to gain
greater use of cash as a budget management tool,” the report states.
The figures reinforce the picture that cash use has increased due to cost of living pressures.
“While the report shows that liquidity is in long-term decline, it also shows that people have chosen to use it more in the current difficult economic climate,” said Graham Mott , Link's director of strategy.
Adrian Buckle, head of research at UK Finance, said the trends appear to follow the “pattern we saw after the 2008/2009 financial crisis, where there was a slight increase in the use of cash, but then this is decreased again over time.”
Although the number of cash transactions increased, the share of cash payments continued to decline as the total payment volume increased.
In 2022 cash accounted for 15% of transactions with UK Finance predicting usage would halve by 2032, meaning less than 7% of payments would be made using cash.
Card payments made up the majority of transactions. Half of all payments in the UK were made using debit cards, the report shows.
More than 23 billion payments were made using debit cards in 2022, an 18% increase from the previous year. Credit cards also saw an increase of 19%, reaching 4.1 billion payments.
Access to cash has become increasingly politicized in recent months. As part of the Financial Services and Markets Bill, the Financial Conduct Authority has been given new powers to ensure banks maintain access to physical currency including by reducing the number of branches.
According to consumer group Which, more than half of the UK's bank branches, around 5,162, have already been wiped out since 2015, meaning free use of ATMs has disappeared with them.
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The article United Kingdom: the use of cash grows to keep expenses under control as inflation explodes comes from Economic Scenarios .
This is a machine translation of a post published on Scenari Economici at the URL https://scenarieconomici.it/regno-unito-cresce-luso-del-contante-per-tenere-sotto-controllo-le-spese-quando-esplode-linflazione/ on Fri, 15 Sep 2023 06:00:42 +0000.