Bank of England Adjusts Operational Standing Facility Spreads in Framework Transition

The Bank of England has implemented changes to its Operational Standing Facility as part of a broader shift toward a repo-led, demand-driven operational framework for reserves provision. On December 8, 2025, the central bank announced a recalibration of the OSF spread relative to Bank Rate. The lending facility will now operate at Bank Rate plus 15 basis points, while the deposit facility will function at Bank Rate minus 15 basis points. These adjustments reflect the institution's ongoing transition in its operational approach. The OSF remains available for Sterling Monetary Framework participants to utilize for liquidity management purposes, consistent with other SMF facilities. This modification represents a technical adjustment within the Bank's monetary operations rather than a change in broader policy direction.