§ Mr. Foulkes
asked the Chancellor of the Exchequer if he will list the changes which have occurred since June 1979 in the definitions of the following monetary aggregates: (a) MO, (b) M1, (c) M2, (d) M3, (e) PSL1, (f) PSL2 and (g) Sterling M3.
§ Mr. Ian Stewart
[pursuant to his reply, 7 July 1986, c. 80]: The following changes in definition have been made to monetary aggregates:
- 1. The series which became MO related initially to levels of notes and coin in circulation with the public, banks' till money and banks' operational balances with the Bank of England at the end of each banking month and to changes
438 between those dates; in 1984 it was redefined as, broadly, a series of averages of the levels outstanding on all the Wednesdays in each banking month and the differences between those levels.
- 2. There have been no changes in the definition of M1 since June 1979.
- 3. There have been no changes in the definition of M2 since it was introduced in 1982.
- 4. £M3 and M3 were redefined in 1984 to exclude public sector bank deposits.
- 5. There have been no changes in the composition of PSL1 since the relevant series were introduced in September 1979.
- 6. PSL2 was redefined last month to include non-bank private sector term shares and SAYE deposits with building societies and non-bank private sector deposits with banks with an original maturity of over two years.
The list relates to definitional changes only. It excludes changes in the practicalities of measuring the aggregates —for example those resulting from the redefinition of the monetary sector in 1981.