Having fallen a steeper revised monthly 0.9 percent in December, M4 climbed 1.3 percent in January, its first rise since October. Annual growth was 2.7 percent, up from 1.6 percent and, while historically weak, a 3-month high. However, the key private sector lending counterpart fell 0.2 percent on the month, its third drop in the last four months and trimming its yearly rate from 1.7 percent to just 1.6 percent, equalling a 16-month low.

Excluding intermediate other financial corporations, the picture was much the same. M4 rose 1.4 percent versus December, also its first increase in four months, but similarly-adjusted lending fell 0.3 percent.

Elsewhere, mortgage lending (£2.54 billion after £3.08 billion) declined sharply and approvals (39,637 after 40,540) saw their weakest level since May 2020. More generally, total consumer credit (£1.597 billion after £0.786 billion) rebounded after a very weak December.

In line with December, today's report is consistent with sluggish, if not contracting, private sector activity and a weakening housing market. However, it will not prevent the BoE raising Bank Rate again this month.

M4 is the Bank of England's main broad measure of money supply. There is no target for M4 and in practice the central bank tends to follow an adjusted measure that excludes intermediate other financial corporations in order to get a handle on current underlying trends. The M4 private sector lending counterpart is the most closely watched aspect of the report.

M4 is similar to the M3 measure used in some other countries. M4 includes everything in M2 (also called the retail component of M4) plus other deposits with an original maturity of up to five years; other claims on financial institutions such as repos and bank acceptances; debt instruments issued by financial institutions including commercial paper and bonds with a maturity of up to five years. Understanding the role of money in the economy has always been an important issue for policymakers. And the pickup in broad money growth and decline in credit spreads over the past three years together with more recent financial market turbulence has made it a particularly pertinent issue. Monetary data can potentially provide important corroborative or incremental information about the outlook for inflation. Quantitative easing is essentially a policy aimed at boosting money supply.