Comparing to M4 is somewhat of an apples to oranges comparison. M4 encompasses the money multiplier effect (e.g. assuming a reserve ration of 1:10, a bank receives 10 units of currency, keeps 1 in 10 units in cash, and lends out 9 units; the 9 units in circulation result in 0.9 units - 90% or 1:10) being deposited and still assuming a 1:10 ratio - a further 8.1 units being lent out, ad infinitum, or until they fall down the back of the sofa).
In particular, M4 includes liabilities of non-deposit taking financial companies (Other Financial Companies, or OFCs) which tend to be very active in repo (sale and repossession) markets with billions often in one transaction. OFCs include non-banking subsidiaries of banking groups - a trading subsidiary of a Highly Complex Financial Institution (HCFI, industry term) is likely not to have a deposit taking license (and this subsidiary, in theory, should not be bailed out; practice has proved different).
High powered money, or M0, or roughly Notes and Coin, is the best comparison. The latest edition of Bankstats http://www.bankofengland.co.uk/statistics/Pages/bankstats/de... , the Bank of England's monthly statistical release, shows ~68bn sterling outstanding at end January 2014 seasonally adjusted, and ~67bn non seasonally adjusted.
Still, my 0.015% is not a large number, even compounded over many, many, many years.
I also agree that as MV has to equal PY, perhaps the counterfeiters are doing a service! Monetary Easing for no minting / production costs!
QE finances itself by the government issuing debt purchased by a private buyer - liability issued and asset secured - the balance sheet balances. As purchases, the BoE issue cash (a liability) for purchase of gov't debt (an asset) - balance sheets again balance. Therefore, despite their charitable service, counterfeiters are procreating government debt for coin, and governments tend not to like this.
An interesting quirk in the UK that I'm not sure is present in many other countries or jurisdictions: The Mint (the producer of coins) has minting power independent of the Bank of England i.e. the Bank of England (the UK's central bank) cannot tell The Mint the mix or quantity of coins to, ahem, mint. They are completely different government entities with no power over each other (disclaimer: this was the case, circa 2005, the last time I checked).
My feeling on this particular story: All governments strive for a credible currency, and despite the alternate low % numbers you and I mention, is abhorrent to the idea of the public losing trust in it, even a little bit. Plus the budget could have appeared somewhat underwhelming to some, so why not have an easily digested story thrown into the mix to read with some tea and digestives.