National Lottery mania, foreign tourists and impulse buys of ice-cream in the sultry weather helped account for another pick-up in the amount of cash in circulation in July.
Use of cash has been growing rapidly all year and shows signs of accelerating further, according to Bank of England figures out yesterday. Its growth, year on year, of about 6 per cent has outpaced the increase in the value of retail sales, taking the popularity of cash back to pre-recession levels.
Economists in the City said yesterday this would not in itself trigger a demand from the Bank of England for higher interest rates. However, growth of cash in circulation increased to 6.1 per cent, and has risen at an annual rate of 7.1 per cent in the latest three months.
Sales of lottery tickets of over pounds 100m a week have almost certainly boosted the use of cash. There was a roll-over prize in July, which typically adds an extra pounds 10-12m in ticket sales.
The pound's fall against other currencies this year has given another boost to demand for cash. There were 6.2 million foreign visitors in the first four months of this year - 11 per cent up on a year earlier - and their spending was up 19 per cent at pounds 2.8bn. More Britons have decided to take their holidays at home, too, setting a record for stay-at-home trips. This spending is not included in the retail sales figures.
A final factor behind the growing popularity of cash is the ease of getting hold of it thanks to cash dispensers and the spread of cash-back at retail outlets. Last year, the value of withdrawals from cash dispensers reached pounds 50bn.