As you can see, UK GDP growth has been pretty stable over the last 15 years, as Gordon Brown never ceases to remind us. But whenever those 'M4' money holdings have slowed up, the economy has suffered. And the really bad news is that we've never seen anything like the recent slump in all the time the Bank of England has kept records. If the relationship between M4 money holdings and GDP growth holds, then it looks like we could be heading for as much as a 2% year-on-year slide in annual GDP growth. Very nasty!
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