Together with the FCA, the Bank of England is working with participants to catalyse a transition to using SONIA as the primary interest rate benchmark in sterling markets.
In April 2017, the Working Group on Sterling Risk-Free Reference Rates recommended the SONIA benchmark
(Sterling Overnight Index Average) as its preferred risk-free rate and since then has been focused on how to transition to using SONIA across sterling markets.
Since then there has been a decisive shift away from LIBOR and towards SONIA-referencing transactions in cash markets such that today SONIA is already established as the preferred reference rate in unsecured FRNs and covered bonds, and has also rapidly been adopted in securitisation markets. The basis adopted for all SONIA issues to date has been the same: backwards-looking SONIA compounded in arrears with a five day lag. The use case for a term rate for these cash markets has therefore diminished.
More information can be found here