Sunday 28 April 2019 5:42 pm | Updated: Monday 03 June 2019 12:24 am

Philip Hammond to give verdict on future of 1p and 2p coins

The Chancellor Philip Hammond is set to decide on the future of 1p and 2p coins this week, after much speculation that they could be axed.

City A.M. understands that the two copper coins are likely to be saved by a Treasury review, which is expected towards the end of this week, into the use of different types of cash in the economy.

The review will also discuss the future of the £50 note as well as the rapid increase in contactless and debit card payments. In February the consumer advice group Which called for the government to protect the interests of cash users who would find a cashless society difficult.

Rumours have swirled that the penny and 2p could be taken out of circulation since Hammond called them “obsolete” in his 2018 Spring Statement. The Treasury also suggested that the £50 note could get the chop as it is largely used by criminals.

After the Spring Statement Labour MP Wes Streeting labelled Hammond a “penny pincher” and said he should focus on the health of the economy, while a spokesperson for the Prime Minister said: “There are no proposals to scrap one or two pence coins.”

Today The Mail on Sunday reported a well-placed source as saying: “We will confirm the penny coin won’t be scrapped. You’ll still be able to spend a penny under this Government.”

Many countries, including Canada and Australia, have scrapped their lowest value coins. A treasury consultation which accompanied the 2018 Spring Statement said most 1p and 2p coins were only used once before being discarded or put in a jar.

Last year, economists at the Bank of England said removing the two coins from circulation “would have no significant impact on prices” as price rounding would have little effect and cash transactions make up only a low proportion of spending by value.

In 2016-17 the Royal Mint roughly halved its production of 1p and 2ps to 288m, from around 500m a year earlier.