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Home > Statistics > Explanatory Notes - Sectoral Analysis of M4 and M4 lending

Explanatory Notes - Sectoral Analysis of M4 and M4 lending

Valuation and Breaks


The sectoral analysis of M4 and M4 lending provides additional breakdowns of liabilities to and claims on UK residents for certain items on the monetary financial institutions' (MFIs') balance sheet. These are broken down into three broad categories; other financial corporations (OFCs), private non-financial corporations (PNFCs), and the household sector.back to top




Data are available quarterly from 1963 Q1 and monthly from October 1997.  These data are available not seasonally adjusted and seasonally adjusted.
Publication of data will usually occur on the 21st working day following the end of the reporting period in the Money and Credit statistical release and in Table A4.1 and Table A4.3 in Bankstats (Monetary and Financial Statistics) or subject to the published Statistical Release Calendar and on the Statistical Interactive Database.back to top



Additional sectoral detail data is provided through two main sources:


  • UK-resident banks; a sample of UK-resident banks report data directly to the Bank of England on the form BE.  Around 100 banks with private sector holdings (BT items £2H and £3H or £29D) in excess of £1bn report data on a monthly basis. Reporters of forms IC, IO and IS are also required to report the BE form. All data are reported in sterling, with foreign currency data converted to sterling at the middle spot sterling exchange rate at 4pm on the last working day of the month.
  • UK-resident building societies; From January 2008, data from building societies are collected on the same basis as for UK-resident banks, on the forms BT and BE on a monthly basis (see the article on 'Transition of building society statistical reporting' in the January 2008 edition of Monetary and Financial Statistics).  Prior to this, data for building societies were collected by the Financial Services Authority.  These figures were based on a sample of societies, which were grossed up to achieve full coverage of the building society population in the published data. 

All data are subject to revision if and when new information becomes available.  For more information on revisions practices see the Explanatory Note on revisions.back to top

From September 2011, OFCs’ holdings of M4 include 35% of the sterling inter-MFI difference whereas an additional 35% of the sterling inter-MFI difference is deducted from OFC loans. For further details please see the September 2011 Monetary and Financial Statistics article ‘Estimation and allocation methods within money and credit data’.  From February 2014, the inter-MFI difference allocated to OFCs has been apportioned further with 60% allocated to intermediate OFCs (IOFCs) and 40% to non-intermediate OFCs (NIOFCs).  Prior to September 2011, 95% of the domestic sterling interbank (now inter-MFI) difference was allocated to OFCs’ holdings of M4. This followed a review of its causes (see page 101 of the June 1992 Economic Trends).  



Other financial corporations

Other financial corporations (OFCs) are private financial corporations other than monetary and financial institutions engaged primarily in the provision of financial services, such as financial intermediation, insurance companies and pension funds and activities auxiliary to financial intermediation (such as fund management). OFCs' holdings of M4  include 35% of the sterling domestic inter-MFI difference following a review of its causes (see page 101 of the June 1992 Economic Trends).  Seasonally adjusted OFCs data is calculated as IOFCs M4/M4L plus NIOFCs M4/M4L. Following a review of the seasonal adjustment method for non-intermediate OFCs once a sufficient run of monthly data was available, changes were made to the seasonally adjusted measures of M4 and M4 lending to bring them into line with the usual approach. The changes are detailed in Bankstats, September 2013, ‘Modifications to the seasonally adjusted measures of M4 and M4 lending excluding intermediate OFCs

Private non-financial corporations

Private non-financial corporations (PNFCs) are companies that produce goods and/or provide non-financial services. They are mainly public limited companies, private companies and partnerships where these are distinct from their owners and not owned by government.

The household sector

The household sector comprises:
  • Individuals, i.e. all the residents of the United Kingdom as receivers of income and purchasers of consumer products (for a more detailed breakdown of lending to individuals see Table A5 of Monetary and Financial Statistics.
  • Unincorporated businesses other than unlimited liability partnerships (sole traders)
  • Non-profit institutions serving households, e.g. charities and universities. back to top

Valuation and Breaks


Transit and suspense items

Holdings of M4 by and M4 lending to other financial corporations, private non-financial corporations and the household sector are affected by the allocation of reporters' transit and suspense items (for further details see the notes to the Monetary financial institutions' consolidated balance sheet.

Credit card data

Credit card data include data from building societies from 1992 Q4 onwards.

Banking Statistics Review

Revised banking statistics returns were introduced at the end of September 1997 to bring the UK into line with the European Systems of Accounts Standards 1995 (ESA95).  This led to changes in the definitions of economic sectors.  In particular, unlimited liability partnerships were re-classified into PNFCs and OFCs from the household sector.  Adjustments were made to minimise the breaks in the time series of financial flows.

As a result of these changes, the individuals component of household sector M4 was only available quarterly, one month in arrears.  For further details see the September 1997 article 'Outcome of the review of banking statistics, including effects on monetary and other banking statistics'

Monthly sectoral data

As a result of the introduction of the new banking statistics returns at end-September 1997, comprehensive monthly sectoral data became available.  Data from July 1996 to August 1997 are based on reporting by only about 100 banks, grossed up to represent the total banking sector.  Data from September 1997 onwards have the same comprehensive coverage as the quarterly sectoral series.
Prior to September 1997, sectoral data for a short period was reported monthly on the Q1(M) form. Prior to July 1996, sectoral data was reported to the Bank on a quarterly basis only on the Q1 form. 

Building Societies Statistical Review

In October 1998 a revised monthly building society form was introduced, bringing the building societies into line with ESA95 standards, and breaks in series occurred as definitions changed.

Housing associations

In order to bring their treatment into line with that in the National Accounts, housing associations were reclassified from non-profit institutions serving households in the household sector to private non-financial corporations in August 2005. Flows were adjusted for the change to both sectors; level data however were not break-adjusted.

Building societies transition to Bank of England reporting

Building societies' statistical reporting transitioned from the Financial Services Authority to the Bank of England on 1st January 2008, and some minor changes to the calculation of the sectoral analysis of M4 and M4 lending have been implemented.  The effects of these have been removed from the flows data, and are small in terms of the amounts outstanding unless otherwise footnoted.   

Securitisations Reporting

From January 2010 data onwards, all loans that have been securitised by MFIs will be included on the institutions' balance sheet for statistical reporting purposes. Some institutions reported securitisations on balance sheet prior to 2010, so their reporting did not change. However, other institutions brought back on to their balance sheets loans that had been securitised in the past. When these loans came back on balance sheet, an additional liability to the SPV was also brought on balance sheet, to balance out the increase in loans. This caused a level shift in various series in January 2010, as well as changing the coverage of various series from January 2010 data onwards. For more details, please see the February 2010 Monetary and Financial Statistics article 'Statistical Reporting of Securitisations' by Jennifer Owladi.

Changes to the treatment of loan transfers

The treatment of loan transfers was changed from May 2015 to exclude their effects from all measures of net lending and include their effects in all measures of amounts outstanding from January 2010 data onwards. This affected the M4 lending (M4L, which was renamed as ‘M4L (historical measure)’) net lending measures and the ‘M4 lending excluding the effects of securitisations and loan transfers’ (M4Lx, which was renamed as M4L), amounts outstanding measures. As both measures became identical from January 2010 data onwards, the ‘M4L (historical measure)’ ceased after March 2015 data. For more details about this change, please see the April 2015 Bankstats (Monetary and Financial Statistics) article ‘Changes to the treatment of loan transfers and lending to housing associations' by Zeeshan Akhtar and Alistair Strathern.

Treatment of securities

Data for MFIs’ holdings of securities issued by IOFCs and NIOFCs have been collected since January 2014. These data have been used to improve the calculation of the M4 lending excluding IOFCs measure as securities issued by IOFCs were previously estimated. For further details, please see the January 2015 Monetary and Financial Statistics article ‘Improvements to the compilation of M4 lending excluding intermediate OFCs series and the publication of additional Monetary Financial Institutions’ data’.
From February 2014 data onwards, transfers of quoted shares were omitted from net securities flow series, bringing their treatment more into line with the Bank’s approach to transfers of loans. For more details about this change, please see the May 2015 Bankstats (Monetary and Financial Statistics), ‘Changes to the treatment of securities transactions in the Bank of England’s monetary statistics’, available at

Key Resources


 Changes to the treatment of securities transactions in the Bank of England’s monetary statistics, Strathern, A (2015), Bankstats, (Monetary and Financial Statistics), May 2015
Changes to the treatment of loan transfers and lending to housing associations by Zeeshan Akhtar and Alistair Strathern, Bankstats (Monetary and Financial Statistics), April 2015

Proposed changes to 'lending to individuals' data and some M4 lending series: consultation with users by Zeeshan Akhtar, Sharon Bell and Jenny Owladi, Bankstats (Monetary and Financial Statistics), August 2014

Modifications to the seasonally adjusted measures of M4 and M4 lending excluding intermediate OFCs by Rajveer Berar and Ross Meader, Bankstats (Monetary and Financial Statistics), September 2013 
 Seasonal adjustment of M4 excluding intermediate OFCs (M4ex) - an update by Robert Gilhooly and Fida Hussain, Bankstats (Monetary and Financial Statistics) November 2010
 Seasonal adjustment of quarterly M4 excluding intermediate OFCs (M4ex) by Fida Hussain and Fenella Maitland-Smith, Bankstats (Monetary and Financial Statistics) September 2010
 Impact of securitisations and loan transfers activity on M4 lending by Lorna Hall, Monetary and Financial Statistics, November 2004