Why physical money still matters

Neil Collins’s piece reminds me that I was the advocate for the one pound coin in 1983 and a very successful denomination it has proved to be. The two pound coin deserves greater circulation but, one suspects, the banks, councils, etc., are not too keen on promoting currency coins. As Neil says, the two pounds now has the purchasing power of the one pound coin.

Currency still matters to many people including small businesses. In Suffolk, one popular farm shop that I visit only takes coins, notes or cheques, not that many people have the latter.

I would suggest that for public convenience we should now mint a currency five pound coin and drop the copper coins and perhaps the twenty pence piece.  As a matter of record a few years ago the Royal Mint produced a silver £20 coin, just think how useful that would be!

The Right Honourable Sir John Wheeler, DL

Retail margins

Historically, the concentration of UK grocery retail has resulted in operating margins that are 1-2% higher than on the Continent. It would be interesting to look at comparable margins for Lidl and Aldi in the UK.

Mix and real estate costs are also a distortion. In general, senior management and the cost of capital are also a source of structural differences. Finally, traditionally the UK big four have spent more on high-profile mass advertising, notably television, to build their brands in order to develop a greater dependency on own-label brands in store. In short, we have conspired to create a real estate-based oligopoly in grocery with structurally higher cost based than on the Continent.

Good luck undoing that!

Regards, John Glen

Inflation: a crucial distinction

The author writes that prices in May were the same as in April.

No. Prices were a lot higher in May.

The rate at which prices rose was the same in May as in April – over 8% per annum.

Jeremy Howell

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