{"id":2855,"date":"2009-09-15T07:40:08","date_gmt":"2009-09-15T07:40:08","guid":{"rendered":"https:\/\/mmm.9dotdigital.ca\/?p=2855"},"modified":"2025-03-27T15:48:54","modified_gmt":"2025-03-27T15:48:54","slug":"uk-mutual-fund-inflows-up-as-cash-hoarding-abates","status":"publish","type":"post","link":"https:\/\/mmm.9dotdigital.ca\/?p=2855","title":{"rendered":"UK mutual fund inflows up as cash hoarding abates"},"content":{"rendered":"<p>A <a href=\"http:\/\/www.moneymovesmarkets.com\/journal\/2009\/9\/10\/is-4-uk-money-growth-enough.html\">post<\/a> last week suggested that 4% UK broad money growth was sufficient to support a solid economic recovery because the velocity of circulation may be rising. Expressed differently, the demand to hold money may be declining as cash hoarding related to last year&rsquo;s crisis reverses <\/p>\n<p>One sign of declining money demand is a recent pick-up in mutual fund inflows. Net retail sales of unit trusts and OEICs totalled &pound;14.0 billion in the first seven months of 2009, up from &pound;3.9 billion in all of 2008, according to the Investment Management Association. Sales are on course to reach about &pound;24 billion for the full year, well above the prior annual record of &pound;17.7 billion in 2000.<\/p>\n<p>If a &pound;20 billion rise in mutual fund buying between 2008 and 2009 reflects a reduced demand for money, money supply numbers will understate the growth in cash available to finance economic recovery by &pound;20 billion this year. This is equivalent to 1.3% of the MPC&rsquo;s favoured broad money measure, M4 excluding cash holdings of &ldquo;intermediate other financial corporations&rdquo;.<\/p>\n<p>As the earlier post noted, some monetarist economists argue that QE should be expanded further until broad money growth reaches 6% <em>per annum<\/em> or higher. With money demand likely to be rising by significantly less than 6% <em>pa<\/em>, however, this would risk creating excess liquidity, leading to new asset market bubbles and &ndash; further ahead &ndash; another pick-up in inflation.<\/p>\n<p><span class=\"full-image-block ssNonEditable\"><span><img decoding=\"async\" src=\"\/storage\/graphs\/uk-unit-trust150909.gif?__SQUARESPACE_CACHEVERSION=1253002214170\" alt=\"\" \/><\/span><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>A post last week suggested that 4% UK broad money growth was sufficient to support a solid economic recovery because the velocity of circulation may be rising. Expressed differently, the demand to hold money may be declining as cash hoarding related to last year&rsquo;s crisis reverses One sign of declining money demand is a recent [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3],"tags":[],"class_list":["post-2855","post","type-post","status-publish","format-standard","hentry","category-money-moves-markets"],"_links":{"self":[{"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=\/wp\/v2\/posts\/2855","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=2855"}],"version-history":[{"count":1,"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=\/wp\/v2\/posts\/2855\/revisions"}],"predecessor-version":[{"id":5164,"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=\/wp\/v2\/posts\/2855\/revisions\/5164"}],"wp:attachment":[{"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=2855"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=2855"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=2855"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}