Sterling money markets are functioning normally despite the autumn gilt volatility, according to minutes of the Bank of England’s Money Markets Committee for its September 25 meeting, published on October 13. Members described liquidity as ample and stress as limited, even after a period in which the 10-year gilt yield moved sharply and the Monetary Policy Committee split 6 to 3 to hold Bank Rate at 3.75 percent.
The watch item in the minutes is funding cost, not market access. The committee noted increased competition for retail and corporate deposits, which, if prolonged, could push banks toward wholesale funding and raise funding costs. That is a slower burn channel than a repo dislocation, but it is the one that transmits higher gilt yields into lending rates.
Members also broadly supported extending RTGS and CHAPS settlement hours, following the Bank’s May 2026 consultation, on grounds of innovation, cross border payments and liquidity management. Longer settlement windows change intraday liquidity demand at the margin and are part of the Bank’s wider plumbing agenda alongside its money market code work.
For rates, the minutes are a stabilising data point. They do not change the MPC debate, which turns on energy pass through and second round effects, but they confirm that the September decision was taken against orderly funding conditions, not against a market malfunction that might have argued for caution on balance sheet or rate moves.