With the various “Brexit isn’t turning out for the economy as folk said” stories going around, it’s easy to miss one. And most commentary has missed the biggest one this week. On Tuesday the Bank of England produced its monthly report on how rapidly the country’s money supply is growing, for the period to July 2016. It was a doozy. In the three months to July 2016 — so, including the first month and a half after the referendum — the UK’s broad money supply (on the Bank of England’s preferred “M4ex” measure) grew at an annualised rate of 14.7%. I’m going to write that again: 14.7%!

I suspect most readers have no idea what that means. Have a look at the chart below. The black line is the series I’m talking about. As the children’s game goes: “One of these things is not like the others”. 14.7% is out-of-the-park bigger than any previous recording in this series since it began in 2009. The previous highest value was 8.7%, recorded in the three months to June 2016.

Well, the period since 2009 hasn’t exactly been a strong one for the banks, so it’s not surprising the money supply hasn’t been booming. After all, that was why we had QE, wasn’t it — to try to make up for money growth being so slow? Sure. So let’s go back before 2009. We can’t do that with monthly data, but we can with quarterly data. That’s the red series above. We can see that the highest figure ever recorded for the quarterly data, before the financial crisis, at the peak of the bonds market madness of 2006, when the UK’s money supply was, now notoriously, allowed to surge far out of control, was 12.8%. Yes, that’s right: in the three months to July 2016 the UK’s money supply grew faster than it was growing at the peak of the UK’s financial market madness of the mid-2000s.

Figure 1: Bank of England Broad Money (M4ex) growth, annualised
Figure 1: Bank of England Broad Money (M4ex) growth, annualised

Well, with the money supply growing so wildly in the period to end-July, it’s a good job the Bank of England didn’t do something crazy in August, like cutting interest rates and printing a load of extra money. Oh, wait – that’s precisely what they did, on the basis of just one month of dodgy PMI data, which has reversed in August anyway! Good call, chaps and chapesses.

The Bank of England uses the “M4ex” definition of broad money because the previous “M4” series had some statistical problems in the period of the financial crisis, to do with the way some of the financial sector moved money within itself. Now it could be that something to do with the run-up to the EU referendum and the period immediately thereafter has involved internal transfers that, once again, have gummed up the stats. Let’s hope so, because otherwise the Bank of England has just set off the mother of all out-of-control monetary booms.