FT columnists are developing a penchant for misusing UK monetary statistics.

Last week, Sir Samuel Brittan claimed that “nominal money supply has been allowed to fall by 10% since September 2010”. No conventionally-defined aggregate has displayed such weakness. The Bank of England’s favoured broad money measure, M4ex, rose by 1.8% between September 2010 and August 2011.

Sir Samuel may, possibly, be referring to cash held in banks’ reserves accounts at the Bank of England, which have fallen from £144 billion on 29 September 2010 to £126 billion as of Wednesday this week, a 12% decline. Reserves, however, are a component of the monetary base and not a measure of the “money supply”, which refers to monetary assets held by non-banks. The £18 billion fall, moreover, needs to be placed in the context of a £109 billion rise over the prior two years.

This morning, Martin Wolf argues for more QE or, preferably, “helicopter money” – fiscal expansion financed by borrowing from the Bank of England – partly on the grounds that the M4 broad money measure shrank by 1.1% in the year to July 2011. (August figures were released yesterday, showing a 0.6% annual fall.) Mr Wolf seems unaware that the Bank and independent monetary analysts long ago shifted focus to M4ex, which excludes deposits held by financial intermediaries largely transacting interbank business. Interbank deposits, by definition, are excluded from the “money supply”.

As noted yesterday, a broader liquidity measure incorporating foreign-currency deposits and public-sector money substitutes grew by 4.5% in the year to August, up from 0.9% a year before – hardly suggestive of an intensifying monetary squeeze.

The well-connected FT, however, is likely to be reflective of official thinking so the pro-QE line supports the expectation here that the MPC will launch QE2 next week. With only the PMI inputs yet to be released, the “MPC-ometer” continues to suggest a 6-3 majority in favour of easing action, probably in the form of a £50-75 billion expansion of gilt purchases.