M0

M0

1. Narrow money

2. Includes notes and coins in circulation plus banks' operational deposits lodged with the BoE.

3. Is an indication of consumer spending and retail sales.

4. Growth in M0 indicates that consumer spending is buoyant.

5. Contraction in M0 indicates that consumers are behaving more cautiously.

6. M0 reflects changing in economic cycle but does not cause them as it has little effect on total national output or inflation.