M4 resumed its downward trend in February. Having risen a slightly shallower revised monthly 1.2 percent in January, the broad money aggregate fell 0.4 percent, its third decline in the last four months. Annual growth slumped from 2.6 percent to 1.0 percent, matching its weakest print since September 2018. Driving the latest monthly decrease was private sector lending which contracted 1.1 percent, its fourth drop in the last six months and pushing annual growth sub-zero at minus 0.4 percent.

Excluding intermediate other financial corporations, the picture was little stronger, M4 falling 0.2 percent versus January and similarly-adjusted lending down 0.9 percent.

Elsewhere, mortgage lending (£0.74 billion after £2.00 billion) again declined sharply but approvals (43,536 after 39,647) rebounded. More generally, total consumer credit (£1.413 billion after £1.686 billion) was also weaker but close to historic norms.

In the main, the February data are soft and in line with sluggish economic activity. Still, the overall credit statistics remain firm enough to suggest that, despite rising interest rates and low confidence, the consumer sector is keeping its head above water.

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.