The Bank said that seasonally adjusted M4 - a broad measure that includes notes and coins in circulation, plus personal and bank deposits - grew 0.7 per cent in June, slightly below the May figure of 0.8 per cent.
Separately, a survey by the British Bankers' Association showed the total lent by big British banks to the private sector rose by pounds 3.37bn in June. The BBA also reported another rise of pounds 256m in consumer credit in the same month.
Net mortgage lending by building societies reached pounds 977m last month, down from pounds 1.1bn in May but 12 per cent up on the same period last year. New loan approvals - which feed through into actual loans after a lag of about six weeks - reached pounds 3.4bn.
Adrian Coles, director general at the BSA, said: "Strength in the consumer side of the general economy coupled with stronger house prices are all likely to help to increase confidence."
City economists said the figures pointed to a substantial pick-up in consumer spending in the months ahead and would make it more difficult for the Chancellor, Kenneth Clarke, to justify another pre-election cut in interest rates. David Gasparro, UK economist at Schroders, said: "The recent money supply data are slightly worrying in terms of the shift towards lending to consumers and away from lending to companies."
The expected annual M4 growth rate was unchanged at 10 per cent and outside the Government's monitoring range of 3 to 9 per cent. Strong money supply growth is often seen as a warning signal pointing to future inflation. Eddie George, Governor of the Bank of England, said on Tuesday that interest rates might have to increase if the rise continued unchecked. However, a Treasury official said: "M4 growth seems to have stabilised during the second quarter, which is consistent with annual growth of just under 9 per cent."
Most City economists expect Mr Clarke to cut interest rates below their present 5.75 per cent level at least once more.
Jonathan Loynes, economist at HSBC Markets, said: "With activity in industry still weak and the inflation picture improving rapidly, Mr Clarke is unlikely to be deterred by M4 alone."
Backing for Mr George came, indirectly, from a quarterly survey by the British Chambers of Commerce, showing that manufacturing industry may be on the road to recovery.
Factory sales, new orders and confidence all increased significantly in the last three months, the BCC found in its survey of more than 8,000 companies. Service sector growth held steady at a relatively high level.
It showed the proportion of firms reporting higher sales in the UK market, minus those reporting declining sales, rose to 19 per cent from 8 per cent. The BCC suggested this weakened the case for further interest rate cuts.
Ian Peters, deputy director general, urged Mr Clarke to follow stable fiscal and monetary policies and not to let the election cloud his judgement.Reuse content