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Most people think that money is what we put in our pockets – our £10 notes and 5 pence coins – which are made by the Bank of England. The Bank prints the notes, and the royal mint makes our coins on their behalf. But this money accounts for only 3% of the money created.

So where does the other 97% come from?

As a recent report from the bank of England explained:

“Where does money come from?  In the modern economy, most money takes the form of bank deposits. But how those bank deposits are created is often misunderstood. The principal way in which they are created is through commercial banks making loans: whenever a bank makes a loan, it creates a deposit in the borrower’s bank account, thereby creating new money. This description of how money is created differs from the story found in some economics textbooks.”

This short video from Positive Money shows how it happens:

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“UK income inequality is among the highest in the developed world and evidence shows that this is bad for almost everyone.” The Equality Trust

Although there has been a lot in the news about benefit fraud, it is actually relatively low and has little economic impact. It will not alleviate austerity measures, or bring the country out of debt, but as long as it is made the focus of the economic battle other issues such as tax avoidance and tax evasion remain in the political background