The Bank of England's Money Markets Committee met to discuss the health of UK money markets and repo activity. Members reported that money markets continued to function smoothly, with stable funding conditions even as bond markets experienced increased volatility. Liquidity remained ample, with limited signs of stress across sterling and cross-currency funding markets.
The Bank said that use of its market-wide repo facilities was proceeding as intended as part of its transition to a repo-led operating framework. Members discussed potential volatility in asset markets, but concluded that overall money market functioning remained robust. Some members noted emerging funding pressures in euro markets as European central bank liquidity declined.
The committee also heard about plans to extend the operating hours of the Bank's payment settlement systems, RTGS and CHAPS. A consultation in May 2026 received broadly supportive feedback, with respondents favouring gradual expansion. However, members highlighted practical challenges that would need addressing, including the design of liquidity facilities outside current hours and implications for smaller firms with limited operational resources.
Members noted increasing competition for retail and corporate deposits, though this had not yet materially affected funding plans. The Bank said this area would continue to be monitored, as sustained competition could increase wholesale funding requirements and costs over time. The committee will receive further updates on settlement hours plans and other sterling money market developments.