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UK to switch to plastic banknotes in 2016

The Bank of England (BoE) announced on Wednesday it will ditch paper banknotes in favor of plastic ones in 2016, following in the footsteps of over 25 other countries.

BoE Governor Mark Carney introduced the notes in 2011 in Canada while heading its central bank. The notes are also in use in Australia, Mexico, New Zealand and Singapore, among others.

"Ensuring trust and confidence in money is at the heart of what central banks do. Polymer notes are the next step in the evolution of banknote design to meet that objective. The quality of polymer notes is higher, they are more secure from counterfeiting, and they can be produced at lower cost to the taxpayer and the environment," Carney said in a statement.

Paper banknotes have been issued by the BoE ever since it was created in 1694 while the first fully printed notes appeared in 1853. They have come under criticism in recent times, however, for being less secure, less resistant to dirt and less durable than their plastic counterparts.

Announcing the results of its "polymer banknote consultation" on Wednesday morning, the bank said there were "compelling reasons" to print on polymer, rather than paper.

In addition, polymer banknotes are more environmentally friendly, the bank said on Wednesday and, because they last longer are, over time, cheaper than paper banknotes.

Nearly 13,000 individuals gave feedback during the public consultation program with 87 percent of those who responded in favor of polymer, only 6 percent opposed and 7 percent neutral.

(Read More: UK Stops Supplying €500 Notes to Fight Crime)

The bank said that it would introduce smaller banknotes which would be easier to fit into purses and wallets but the existing "look" of the notes, which show the Queen's image on one side and notable countrymen and women -- such as Winston Churchill and the soon to appear author Jane Austin -- on the other, would not change.

(Read more: Pound and no prejudice—Guess who will grace £10 notes?)

Initially only the new-style £5 and £10 banknotes would be printed on polymer, starting with the Churchill £5 to be issued in 2016, before the practice is rolled out to other denominations.

- By CNBC's Holy Ellyatt, follow her on Twitter @HollyEllyatt

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