House purchases delayed by BoE IT payment system crash

A computer crash at the Bank of England, involving one of its most vital payment services, delayed thousands of house purchases and other high value transactions on Monday, as the bank promised to investigate the matter.

The central bank said it had been hit by “a technical issue” which prevented it opening a vital payment system — a similar fault had taken place in October 2014.

The real-time gross settlement (RTGS) service and Chaps high value system handled £775bn of payments daily on average in 2022-23.

The system is one of the most important financial pieces of plumbing in the economy, and “lies at the heart of every retail and wholesale payment in the UK”, according to the BoE.

Commercial banks and people trying to complete a house purchase on Monday using the Chaps system were among those directly affected.

But the BoE said later in the afternoon that most housing transactions would have been processed during the day as the system was back up and running by lunchtime, a quicker recovery time than nine years ago.

However, the outage could have left thousands of Britons nervous that their housing transactions would not proceed as planned.

The cause of the fault was a database corruption that prevented the payments system from opening successfully, according to the BoE.

Some customers of banks might have lost money as a result, but the sums involved would be small, the BoE said. After the 2014 episode, it paid out less than £5,000 in compensation.

Officials at Threadneedle Street said there would be an investigation into the specifics of the latest outage, adding it was too early to confirm the scope of the report.

BoE officials said there had been progress on protecting the bank’s IT systems because the latest outage had lasted a little under six hours, compared with nine hours in 2014.

However, the technical failure was sufficiently serious to break the BoE’s performance target that its payments systems are available 99.95 per cent of the time.

On Monday afternoon, the central bank said it expected that no transactions would fail as a result of the outage during the course of the day and that it would recover the lost ground.

The bank said it had no plans to extend operations beyond the normal close of business.

The Chaps system is largely used to process house purchases, which involve fast, high-value transfers between bank accounts.

The 2014 outage was caused by weekend maintenance work on the system that triggered unforeseen technical errors.

The error prompted an apology from then BoE governor Mark Carney, who also announced an independent review of the cause of the problem and the BoE’s response.

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