| Actual | Previous | |
| Month over Month | 0.8% | 0.7% |
| Year over Year | 4.3% | 3.5% |
Highlights
In March 2026, the UK's broad money supply (M4) rose by 0.8 percent, up from 0.7 percent rise in the previous month. Annually, M4 expanded by 4.3 percent, up from 3.5 percent in the previous month. While the monthly and annual figures suggest an expansion in money supply, M4 excluding intermediate other financial corporations (OFCs) reveals a slightly weaker strength over the month as it increased by 0.7 percent. On an annual basis, however, it rose by 4.5 percent, up from 4.1 percent in the previous month and stronger than M4, indicating that money held by households and non-financial businesses is still increasing but at a slightly faster pace compared to M4 over the year. This reflects ongoing support for consumption and investment, helping to underpin economic activity without generating inflationary pressure.
The lending landscape presents a more encouraging trend. M4 lending rose by 0.9 percent in March, up from 0.2 percent in February, while annual growth rose to 6.4 percent in March, up from 5.9 percent the previous month. However, lending growth excluding OFCs, considered a more accurate gauge of real-economy dynamics, grew 0.8 percent in the month (up from a fall of minus 0.1 percent the previous month), while it grew by 6.0 percent annually, up from 5.8 percent the previous month. This suggests that household and non-financial firm borrowing is expanding at a measured pace, consistent with stable economic fundamentals. In summary, March's update points to an accelerating money supply growth alongside steady real-economy lending, suggesting an expansionary and supportive monetary environment consistent with stable and non-inflationary economic expansion.
Definition
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.
Description
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.