card technology meant that by 2000, cash payments accounted for less than 75 % of payments by volume. and a number of recent inter - linked developments in what i have called the technologies that support our money may be driving an acceleration of that trend. new regulations have reduced the cost of credit and debit card transactions by capping the fees that card companies and banks can charge merchants. parliament has established the payment system regulator, a new economic regulator, to improve competition and innovation in the payment systems, through which payments using bank accounts are made hitherto dominated by the large banks, to support greater competition and innovation, the bank of england has widened access to rtgs, the high value settlement system, so that large non - bank payment service providers can access it directly rather than having to go through the banks with whom they are in competition. at the same time, the introduction of electronic technology, near field communication, has allowed the development of contactless payments and reduced the ‘ hassle ’ of making small value card payments and enabled smart phones to be used as payment devices. and of course, more commerce is migrating to the internet where physical cash simply cannot be used. internet sales now account for over 15 % of retail sales. we are, as a result, seeing important changes in the way we use money as a means of payment. new players, from the largest technology companies to challenger banks and internet startups are coming into the various elements of the transaction chain. and there seem to be changes in the way we use cash. ‘ payment systems in eleven developed countries ’ feb 1980, bis uk payments statistics, published by the payments council under specified conditions : the bank of england set these out publically in july 2017 : ‘ access to uk payment schemes for non - bank payment service provider ’ all speeches are available online at www. bankofengland. co. uk / speeches the actual amount of cash in circulation is not going down. indeed, over the last few years, demand for cash if anything has gone up slightly growing from about £70bn at the end of 2014 to over £80bn at end 2017. some of this demand can probably be attributed to the use of cash as a store of value – ‘ money under the mattress ’ and to the reduced cost of holding it in a low inflation, low interest rate environment. but while demand for cash has increased, there has been some fall in recent years in the value of cash payments. this stayed pretty constant for roughly the first

future, so it is not surprising that there should be differences of view. and the opportunity to explore and explain these differences in a rational and open way is an important part of getting to a better answer. the outlook for the economy let me turn now to an assessment of the economy. the recent debate has, of course, been dominated by discussion of the implications of the terrorist attack on the united states, and the political and military response. the loss of life was grievous. few of us will forget the sights we saw on our tv sets that day. and for those most closely involved the feelings must still be of the utmost intensity. standing back, from an economic perspective i would say that the most serious impact has been on sentiment, particularly in the united states. consumer confidence there has fallen quite sharply. equity prices dipped in the immediate aftermath of the attack, the sterling price of oil has fallen by some 18 % since the start of september, and credit spreads have risen. of course, equities have since rallied strongly, with the ftse100 for example now back above its pre - september 11th levels. but substantial uncertainties remain. at the very least, firms and households are likely to delay major expenditure decisions until things become clearer. and this may act as a drag on the recovery in activity. the rise in the cost of security and insurance will also probably have a more long - lasting effect on activity. discussion of the attacks has somewhat obscured the fact that the world economy seemed to be slowing more rapidly than expected even before 11 september. overall activity in the us had been weak, despite continued strength in some sectors, notably retail. and the euro area grew by just 0. 1 % in the second quarter, as net trade slowed sharply. the monetary policy reaction has of course been rapid. in the united states, in particular, interest rates have already been reduced by four percentage points since the start of the year. and fiscal policy has been expanded. these actions should clearly stimulate demand. but, as is always the case, the size and timing of these effects is extremely hard to judge. so far this year, the uk economy has fared rather better than its main trading partners. gdp growth has slowed from the peaks it reached during 2000. but the economy still grew by 0. 6 % in the first quarter of this year, and 0. 4 % in the second. much of that strength, of course, reflects domestic demand growth, and particularly household consumption,