BOE Says Key Market Rate Is Working Fine After 70-Day Freeze
- SONIA continues to reflect what’s happening in market: BOE
- Rate used for £90t of contracts from derivatives to mortgages
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Bank of England officials are downplaying an abnormal paralysis in the UK’s most important market interest rate, saying it remains efficient in reflecting what’s happening in markets.
The Sterling Overnight Index Average, or SONIA, has stayed at exactly five basis points below the BOE’s rate since May 7 — or 70 business days. The previous record in data going back to 1997 was just four sessions.