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In 2017 public authorities globally announced that LIBOR*, the most common benchmark that lenders use to calculate the interest rate for financial products in the UK, was no longer sustainable and the market should move to robust alternative rates by 31 December 2021.
This will affect a significant number of businesses. It also impacts around 200,000 mortgage customers.
This new UK Finance LIBOR transition resource has been created to help SMEs and any impacted consumers understand what the LIBOR transition is, how it could affect them and what they need to do. It helps answer any key questions they might have, as well as signposting to all the other useful information available, and offers a glossary and a Who's Who.
Banks and lenders are increasing conversations with customers, looking to transition as many contracts as possible before the end of September to ensure a smooth transition in line with expectations from the UK's national working group and regulators.
If you have any questions speak to your bank, lender or financial adviser.
*London Interbank Offered Rate.
This information takes into account the regulatory material available at the time of publication. It is intended to provide general information only and is not intended to be comprehensive or to provide legal, regulatory, financial or other advice to any person. It is not a UK Finance view or recommendation for how the individual firms or others should transition away from LIBOR. None of UK Finance or any of their respective members, officers, employees or agents shall have any liability to any person arising from or in connection with any use of this document or any information or views contained in this document.
The Risk-Free Rate Working Group (RFR WG), a group of lenders, corporates, professional services firms and business groups, as well as the Bank of England and the FCA, has been working to deliver a smooth transition in the sterling market for businesses. The RFR WG has set the pace for transition, establishing a series of milestones for the industry to meet in order to transition away from LIBOR by the end of 2021. For detail on this timeline see the RFR WG's roadmap. We will include references to all the relevant information from this group as we go through each question