The Bank of England is printing money. Earlier this month, it announced another £150bn of quantitative easing (QE), taking this year’s total to £440bn. In one respect, however, this year’s round of QE is quite different from those of 2009-12.
To see this, we must understand how the money stock changes at all. The M4 measure of it is defined as the sterling bank deposits of non-bank residents. This definition means M4 can change only for a few reasons.
