The Bank of England and HM Treasury are reviewing the powers used to collect data on sterling money markets, seeking to maintain visibility of activity as markets shift. The review considers whether the Bank needs to collect information from group entities to preserve sufficient coverage for SONIA, the rate at which banks lend to each other overnight.
The unsecured overnight market has remained stable, with daily volumes around £55 billion and a spread to Bank rate near 1.9 basis points. Money-market funds have received collective inflows of roughly £15 billion since the start of the year, with increased allocation to overnight lending following changes in liquidity guidance and geopolitical tensions.
The Bank consulted over summer on extending RTGS and CHAPS settlement, the systems that process payments, towards near 24-hour, seven-day operation. The Bank intends to return to industry in the first quarter of 2027 with feedback themes and next steps. Extended settlement hours could affect when SONIA is calculated, published and reported, with participants indicating a strong preference to maintain the current 09:00 publication time.
In derivatives markets, ICE extended trading hours for SONIA futures and gilt futures from 01:00 on 6 July, enabling greater participation from Asian, Middle Eastern and United States clients. SONIA futures and options recorded exceptionally high volumes in March during increased geopolitical volatility, while recent instability has boosted volumes again, though not to record levels.