Broad money expanded 0.5 percent on the month in February following a revised flat performance in January. As a result, annual growth climbed from minus 2.2 percent to minus 1.2 percent, although this was still its eighth successive sub-zero print. Annualised growth over the last three months was a solid 4.0 percent, its strongest reading since October 2022. However, M4 lending declined 0.9 percent, its first fall since last September and reducing its 3-monthly rate to minus 2.8 percent.

Excluding intermediate other financial institutions, M4 rose 0.3 percent versus January and was 1.1 percent lower on the year. Similarly-adjusted lending contracted 0.7 percent and was up 0.3 percent respectively.

Elsewhere the financial data were also mixed. In the housing market, mortgage approvals climbed from an upwardly revised 56,087 to 60,383, their third straight gain and their highest level since September 2022. Mortgage lending was £1.51 billion, up from a £1.07 billion repayment. However, overall consumer credit still eased from £1.77 billion to £1.373 billion.

In sum, falling mortgage rates are providing a boost to the housing market but consumers in general remain cautious about borrowing now ahead of a possible cut in Bank Rate in June.

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.