What Is M4 Money Supply?

M4 is the Bank of England’s broadest tracked aggregate — notes and coin plus nearly all sterling deposits held by UK households, businesses and non-bank financial institutions. Our own UK figure is $5.24T (2024, World Bank annual FM.LBL.BMNY.CN) — not the Bank of England’s own monthly M4, which runs more current.

What M4 money supply includes

M4 is the Bank of England’s own broadest measure. It counts notes and coin in circulation, plus nearly all sterling deposits, certificates of deposit included. The holders are UK households, non-financial businesses and non-bank financial firms. They hold those deposits at UK banks and building societies. The Bank of England calls that group the “M4 private sector,” and publishes the definition itself. Deposits held by banks themselves, or by central government, don’t count. That’s a wider net than the components behind M2 broad money in the United States, or M3 money supply in the euro area. M4 folds building societies in alongside banks. Earlier UK measures didn’t.

On the same liquidity ladder, the M0 monetary base is physical currency in circulation plus bank reserves. It’s the base every aggregate sits on. M1 narrow money adds demand deposits next. M2 broad money, the US headline, adds savings deposits, small time deposits under $100,000 and retail money market funds — near money, not literal cash in hand. M4 sits at the far end of that same ladder, in the UK alone.

Why the UK calls its broad aggregate M4, not M3

The UK ran its own sterling M3 through the 1980s. It was tracked as a policy target under the government’s Medium Term Financial Strategy. M4 replaced it in 1987, after the Building Societies Act 1986 let building societies compete more directly with banks. The Bank of England widened its broadest aggregate to cover both, and the wider measure needed a new name. That’s one letter past where the euro area and Japan stopped. Their M3 already covers what the UK needed a fourth rung to capture. It’s also one letter past the Federal Reserve definition of the US ladder, which stops at M2. The label difference isn’t a sign the UK tracks “more layers of money” in some universal sense. M4 is one monetary aggregate among several. Britain simply built its ladder one rung taller, and the letter records which deposits its central bank chose to bundle. The full M0-M4 ladder, country by country, covers the other three letters the same way, each one defined at our money supply glossary.

Our UK M4 money figure, and its limits

Our own UK figure comes from the World Bank’s annual mirror, FM.LBL.BMNY.CN. That series reports in local currency. We convert it ourselves at the World Bank’s period-average annual rate (PA.NUS.FCRF), which gives $5.24T for 2024. It is not the Bank of England’s own M4, which the BoE publishes monthly and much more currently. The World Bank republishes what the BoE reports, once a year, with a lag. A reader who checks the BoE’s live M4 series will find a different, fresher number. The gap is a reporting-frequency difference, not an error on either side. We hold annual UK data because that’s what our primary source offers. Anyone who needs the monthly series should go to the Bank of England directly. One consequence for anyone building a table: our UK row carries an annual timestamp, not a monthly one. Say so before setting it beside a monthly US or euro-area figure. Full sourcing for every series we hold, this one included, lives at methodology; we cover the UK’s full money-supply picture on its own page.

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