The Bank of England is changing its official operations in the sterling money markets to reduce overnight interest rate volatility. This will bring higher overnight rates, which is good for funds with a heavy weighting in these deposits. It may also increase liquidity in the overnight market to much later in the trading day, allowing such funds to offer a later cut-off time. MMFs will be less prone to arbitage-driven redemptions when overnight rates move. The Bank’s new system involves allowing banks to average out the sums they hold with it over a maintenance period. If overnight rates fall, banks will be able to switch funds to the Bank, causing the overnight rates to rise again, and vice-versa.