Money supply is simply the amount of money available in the economy. There are several ways of measuring the various sorts of money, depending on how wide you make the definition.
In the UK, M0 - also called narrow money - includes only the most liquid types of money: cash, cash in bank tills, and deposits held at the Bank of England. M4 (M3 in the US) consists of cash, current-account deposits at banks and other financial institutions, and savings deposits.
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Bank of EnglandGlossary The Bank of England is the UK's central bank. It started life in 1694 as a private bank set up by London merchants as a vehicle to lend money to the government and to deal with the national debt.
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Index-linked gilts
Glossary Index-linked gilts are sterling bonds issued by the Bank of England and listed on the London Stock Exchange, introduced to act as a hedge against inflation for pension funds.
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Monetary policy
Glossary Monetary policy is about exercising control over the money supply (the amount of money circulating in the economy) with the aim of influencing the economy.