Lowest demand for cash since central banks hoarded notes over millennium bug fears | Business News

Demand for banknotes is at its lowest since central banks stockpiled money for worry of the millennium bug, the Financial institution of England’s sole foreign money printer mentioned.

The British banknote maker De La Rue has mentioned demand for notes is on the lowest ranges for greater than 20 years.

Demand dropped to a 20-year low, versus an all-time low, as a result of central banks hoarded notes for worry of the millennium bug in 2000, a De La Rue spokesperson mentioned.

This dampened demand within the years following the flip of the millennium.

Within the run-up to 2000, there was widespread fear that the pc programs underpinning the monetary and banking sector – in addition to business general – wouldn’t settle for the double zero of dates after 31 December 1999 and would malfunction.

The present low demand can be because of central banks stocking up on money, this time through the COVID-19 pandemic, the spokesperson mentioned.

Throughout occasions of uncertainty, akin to a world pandemic, banks, ATM operators and submit workplaces usually guarantee they’re absolutely stocked with banknotes. On the identical time, use of money dropped, as did some types of discretionary spending.

Consequently, De La Rue mentioned it has a low order e-book going into its 2024 monetary 12 months and the outlook has “a major diploma of uncertainty”.

The impacts are additionally being felt within the present 2023 monetary 12 months and on Wednesday morning the corporate mentioned it expects full-year adjusted working income to be a “mid-single digit proportion” – round 5% – which is under market expectations.

Learn extra:
Remember the Y2K bug? Microsoft confirms new Y2K22 issue
‘Planes falling out of the sky’ – how the bug spread fear

De La Rue introduced it’s in discussions with its lenders searching for an modification to its banking covenants that displays the revised outlook and the rise within the firm’s funding prices attributable to higher Bank of England interest rates.

Wednesday’s buying and selling replace was simply the most recent in a string of revenue warnings triggered by administration mishaps.

In March this 12 months, Sky News reported that De La Rue requested respiration house from its pension trustees by delaying almost £20m of retirement funding funds.

Late final 12 months De La Rue criticised its auditor, EY, for together with a going concern warning in its accounts.