Bank’s QE programme boosts UK money supply

THE BANK of England’s benchmark gauge of the money supply rose in November at its fastest monthly pace since April, in another sign that credit conditions in the UK economy are beginning to ease.

M4, money supply excluding intermediate other financial corporations, rose by 0.9 per cent month-on-month, though it fell 2.2 per cent over the three months to November.

The data raises hopes that Bank efforts to boost the money supply – notably its £200bn quantitative easing (QE) programme – are having an increasing impact on the economy.

“With data and survey evidence generally firmer, the economy almost certainly having returned to growth in Q4 2009, and inflation now moving back up and set to spike markedly over the next few months, we suspect November’s £25bn increase to £200bn marked the final extension to the QE programme,” said Howard Archer, economist at IHS Global Insight.