FROM September 13th cash machines in England and Wales will start dispensing the Bank of England’s new £5 note, and Britain’s first polymer currency. The new plastic notes are smaller than those they are replacing; they are also easier to keep clean, more water-resistant and two-and-a-half times more durable. Last year 21,745 reimbursement claims were made for damaged banknotes, with a face value of £11.3m ($15m). A total of £128,000-worth of such claims were listed by the Bank of England as “chewed/eaten” (by what or whom it does not say).
The bank has sent out about 440m of the new fivers and is planning to introduce plastic £10 and £20 notes by 2020. Despite the increasing use of electronic money, like online and mobile-payment systems and digital wallets, the quantity of physical banknotes in circulation has risen significantly during the past decade, increasing from 1.9 billion to 3.4 billion between 2004 and 2016, with their total value jumping from £36 billion to £68 billion. One reason for this extra demand is that after the financial crisis, interest rates in Britain plummeted, reducing the opportunity cost of holding cash outside bank accounts. With interest rates recently cut again following the Brexit referendum, Britons are unlikely soon to lose their appetite for hard currency—whatever it is made of.