The Public Accounts Committee (PAC) has urged the Bank of England to investigate a “missing” £50 billion in sterling notes.

The cross-party group of MPs said that while demand for sterling notes has increased, the Bank of England does not have a convincing reason for the growth.

According to the committee, the bank estimates 20-24 per cent of issued bank notes are used or held for transactions, which leaves around £50bn worth of issued notes that may be being used overseas for transactions or savings, held in the UK as unreported household savings, or for use in the shadow economy.

A PAC report published today found that oversight of the production and distribution of notes and coins is “unclear” and “fragmented” across responsible authorities.

The PAC said that authorities have been “behind the curve” in ensuring access to cash for consumers and businesses and claimed they are failing to understand or act on the clear dangers of hardship if the UK continues its “precipitous” move towards a cashless society.

Meg Hillier MP, chair of the Public Accounts Committee, said: “Our run up to Christmas and Christmas shopping is obviously very different this year, but it highlights how increasingly difficult it has become to, for example, choose to support a small local business by paying it in cash – generally the cheapest form of payment to accept.

“In many areas where you can use cash you’d be hard pressed to find it, at least without paying an ATM fee that may be a substantial percentage of a small withdrawal – yet making frequent, small withdrawals can be a key budgeting tool for those on low incomes, and least able to afford those fees.

“Conversely, £50 billion of sterling notes – or about three quarters of this precious and dwindling supply – is stashed somewhere but the Bank of England doesn’t know where, who by or what for – and doesn’t seem very curious."

Hillier added that the Bank needed to be “more concerned” about where the missing £50 billion is.

“Depending where it is and what it’s being used for, that amount of money could have material implications for public policy and the public purse. The Bank needs to get a better handle on the national currency it controls,” she concluded.

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