Broad money rose 0.3 percent on the month in July following an unrevised 0.5 percent increase in June. The advance lifted annual growth from 1.0 percent to 2.1 percent, a 3-month high that means M4 has now expanded in five of the last six months. The key lending counterpart was also up a monthly 0.3 percent, lifting yearly growth from 1.1 percent to 1.4 percent.

Excluding intermediate other financial institutions, M4 climbed 0.4 percent versus June nudging up annualised 3-monthly growth from 2.5 percent to 2.6 percent but this was only a 2-month peak. Similarly-adjusted lending also rose 0.4 percent on the month. Underlying trends remain positive but still quite subdued.

Elsewhere, in the housing market, mortgage approvals increased from 60,611 to 61,985, their strongest print since September 2022, while lending picked up from £2.63 billion to £2.79 billion, its best mark since December 2022. At the same time, overall consumer credit rose £1.215 billion after a £0.869 billion gain last time.

Today's financial data remain consistent with respectable economic growth and so further ease pressure on the BoE to rush into another cut in Bank Rate next month. That said, with inflation on the way down, another 25 basis point reduction cannot be ruled out.

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.