M4 Money Supply MoM

M4 Money Supply MoM is the 1-month growth rate of M4, broad money that covers cash, deposits and short bank paper. The Bank of England publishes it in the monthly Money and Credit release from MFI balance sheets.

It covers sterling holdings of UK residents at UK monetary financial institutions, including banks, building societies and the Bank itself. The headline is M4ex, which leaves out intermediate other financial corporations, whose deposits resemble those of banks themselves. M4 began in 1987, and monthly data run from June 1982 in seasonally adjusted and unadjusted form. It is not lending, interbank money or foreign holdings.

Holdings are measured at end-month, with foreign currency converted into sterling at the 4pm middle rate on the last working day. Final data usually appear on the 21st working day after the month ends.

Each release is part of Money and Credit, alongside lending to individuals and businesses, summary tables and Bankstats database tables. All data are subject to revision when new information arrives, rarely beyond 2 years. A release may be re-released outside the timetable after a significant correction to the aggregates. Each release carries its publication date and the next release date, and release PDFs print a 09:30 publication time.

M4 rises or falls with the cash, deposits and short bank paper that households, non-financial firms and non-intermediate financial firms choose to hold.

• Sterling notes and coin: cash in circulation with UK households and firms, excluding estimated notes held by non-residents.
• Sterling deposits, including certificates of deposit: the core deposit liability of UK MFIs to UK residents.
• Commercial paper, bonds, FRNs and other instruments: short bank paper, including floating rate notes, up to and including 5 years of original maturity.
• Claims from repos: secured deposits with banks through repurchase deals, counted from December 1995.
• Estimated holdings of sterling bank bills: estimated holdings, because the sectoral split of certificates of deposit cannot be fully identified.
• Sterling inter-MFI difference: 35% allocated to other financial corporations deposits since September 2011.

The October 2019 release (published November 29, 2019) showed a weak headline that hid splits across holders. Total money rose by £1.6 billion, weak against September and the previous 6-month average, while households added £3.7 billion in interest bearing sight deposits. Non-intermediate financial firms, such as pension funds or insurers, cut £2.4 billion while non-financial firms added £0.4 billion. Rounded parts do not sum to the headline in seasonally adjusted data, and September holdings were later corrected after inconsistent reporting.

1. Amounts outstanding, holdings: Start with end-month holdings in sterling, with foreign currency converted at the last working day rate.
2. Other changes, OCVA: Strip out reclassifications, population shifts, currency revaluations, write-offs and securitisation moves.
3. Flow: Take closing minus opening balances adjusted for OCVA, called Changes or net flow. With no OCVA it is the simple difference in holdings.
4. 1-month growth, MoM: Divide the flow by the prior month holding and multiply by 100. The March 2016 table (published April 29, 2016) showed a £7.3 billion flow over £1,887.0 billion in holdings, about 0.4%.
5. Seasonal and break adjustment: Remove breaks, jumps from reclassifications, then adjust for seasons with X-13ARIMA-SEATS. It needs about 3 years of data; derive flows from adjusted levels and compound monthly rates for 3-month, 12-month and annualised growth.