Demand for banknotes is at its lowest since central banks stockpiled cash for fear of the millennium bug, the Bank of England’s sole currency printer said.

The British banknote maker De La Rue has said demand for notes is at the lowest levels for more than 20 years.

Demand dropped to a 20-year low, as opposed to an all-time low, because central banks hoarded notes for fear of the millennium bug in 2000, a De La Rue spokesperson said.

This dampened demand in the years following the turn of the millennium.

In the run-up to 2000, there was widespread worry that the computer systems underpinning the financial and banking sector – as well as industry overall – would not accept the double zero of dates after 31 December 1999 and would malfunction.

The current low demand is also thanks to central banks stocking up on cash, this time during the COVID-19 pandemic, the spokesperson said.

During times of uncertainty, such as a global pandemic, banks, ATM operators and post offices typically ensure they are fully stocked with banknotes. At the same time, use of cash dropped, as did some forms of discretionary spending.

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The new plastic ten-pound note with Jane Austen on it was launched in 2017

As a result, De La Rue said it has a low order book going into its 2024 financial year and the outlook has “a significant degree of uncertainty”.

The impacts are also being felt in the current 2023 financial year and on Wednesday morning the company said it expects full-year adjusted operating profits to be a “mid-single digit percentage” – around 5% – which is below market expectations.

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De La Rue announced it is in discussions with its lenders seeking an amendment to its banking covenants that reflects the revised outlook and the increase in the company’s funding costs due to higher Bank of England interest rates.

Wednesday’s trading update was just the latest in a string of profit warnings triggered by management mishaps.

In March this year, Sky News reported that De La Rue requested breathing space from its pension trustees by delaying nearly £20m of retirement funding payments.

Late last year De La Rue criticised its auditor, EY, for including a going concern warning in its accounts.