Demand for 50 Notes 'Fueled by Lack of Faith in Banks'

Mr Bailey, who is also executive director for banking services at the Bank, said that low interest rates were another possible explanation.

The total value of £50 notes in circulation has risen to £9bn from £7bn since the summer of 2007, he said in a speech yesterday. He said that circulation picked up from the onset of the financial crisis, and rose more sharply still from last autumn, in the wake of the collapse of Lehman Brothers.

"Two features of the current situation strike me as most relevant in explaining this development: first, lower levels of public confidence in the banking system and second, low interest rates," he said.

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