The Bank of England's Bankstats publication this month contains for the first time a table providing detailed figures for "adjusted" M4 and M4 lending – i.e. excluding banks' business with financial intermediaries ("intermediate other financial corporations"). If these series had been made available 12-18 months ago, economists and the MPC would have been better able to anticipate the recession.

The Bank was aware of possible problems with its M4 and M4 lending measures in 2007: an article in the September Quarterly Bulletin proposed a redefinition to exclude intermediaries while the November Inflation Report warned that growth rates were being inflated by the financial crisis. Since May 2008, the Inflation Report has contained a chart showing the annual growth rate of adjusted M4; this was extended to M4 lending in August last year. The fuller data set published in the new Bankstats table could, in theory, have been made available at least a year ago.

The chart shows a measure of economic momentum based on the purchasing managers' surveys – a weighted average of the services new business and manufacturing new orders indices – together with the six-month growth rate (not annualised) of real adjusted M4 (i.e. deflated by consumer prices). In contrast to the headline measure, real adjusted M4 slowed abruptly in late 2007 following Northern Rock's implosion and contracted during the first half of 2008 as inflation spiked higher. This weakness warned of serious economic deterioration at least three months before the purchasing managers' indicator fell below the key 50 level in May 2008.

The MPC reduced Bank rate in December 2007, February 2008 and again in April then held it at 5.0% until October. It is debatable whether members pay much attention to monetary trends but, had the adjusted data been available, there is at least a chance that the Committee would have cut further over the summer despite a surge in headline CPI inflation to a September peak of 5.2%. It might also have been swifter to heed external recommendations for quantitative easing.

Just as it led on the way down, the adjusted money measure also foreshadowed the recent improvement in economic news. The six-month rate of change troughed last September and has recovered steadily, currently running at about 3% – a level historically consistent with economic expansion. The purchasing managers' indicator bottomed in November last year and the recent move back above 50 appears to confirm that the economy has stopped contracting.