15  All speeches are available online at www.bankofengland.co.uk/news/speeches and @BoE_PressOffice  15  One key difference from the global financial crisis is the state of the banking system. A decade ago, its impairment led to slow growth in bank deposits and lending. With the financial system now repaired, bank intermediation has increased sharply during this time’s crisis. Supported by exceptional monetary and fiscal support, bank deposits and lending have grown rapidly. Annual growth of global M3 is currently running at almost 20% (Chart 13), its highest level since 1988. Chart 13: Growth in Global M3 (YoY)  per cent  20 18 16 14 12 10 8 6 4 2  2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020  0  Source: OECD. Notes: Based on total OECD aggregate. The same is true in the UK, where annual growth of commercial bank money (M4) currently stands at a little over 14%. Annual growth of M4 lending is more modest, at just over 4%, though this is still around 2 percentage points above its average over the past decade. It has been buoyed by the support packages extended to UK companies, with around 1.5 million business loans made totalling around £ billion. A decade ago, movements in broad money broadly tracked movements in money GDP – the velocity of circulation of broad money was roughly stable.
And firms’ labour costs grew an estimated 1.3% in the last quarter of 2014, close to core inflation. Consumer confidence and retail sales growth are at their highest in over decade. Similarly real income growth is on course to be the strongest for more than a decade. Firms’ investment intensions are robust. Surveys point to solid growth consistent with trend. There is little evidence of a deflationary mindset setting in. 13  That reflects an excess of saving over investment. That in turn reflects a combination of factors including the protracted process of balance sheet repair in both public and private sectors, and more secular factors like demographics (ageing and slower population growth), the higher steady state costs of financial intermediation relative to the pre-crisis period, and, possibly, lower productivity growth, as a consequence of lasting scars from the crisis. See Carney, M (2013), “The spirit of the season” at The Economic Club of New York; and box on page 42 of Bank of England (2014), Inflation Report, August. 14  Protracted pass-through, generated by stickiness in the domestic price of imported goods, challenges the classical view that the exchange rate provides an efficient shock-absorber in the face of foreign shocks. 15  These figures refer to the quarter-on-quarter annualised growth rate of the Average Weekly Earnings series.