BOE’s Liquidity Drain Is Lifting Key SONIA Rate Again

The UK’s most important market interest rate has been rising for the first time in almost a year, reflecting the Bank of England’s ongoing efforts to drain excess liquidity from the financial system.

The Sterling Overnight Index Average, or SONIA, rose for five sessions through Tuesday — the first consecutive gains since April. That broke an abnormal paralysis where it was stuck exactly five basis points below the BOE’s key rate for months.