What if UK pensions sell global equities to meet gilt margin calls and spread the LDI shock?
To meet gilt margin calls, UK pensions sell global equities and credit, transmitting the LDI shock internationally as the BoE warned in its 2022 Financial Stability Report.
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The butterfly cascade
How this trigger trickles across markets, left → right — the root shock, its first‑order moves, then the ripple effects. Drag any node; tap a market for its real price history.
Resolution timeline — how this probability is moving
Our model's odds (electric blue) over time vs the market's (Polymarket, amber), from the past toward the 1–3 years horizon. Each dot is a real macro event that nudged the probability — green pushed it up, red pushed it down. Tap a dot for the source. Loading the probability audit trail…
What it would mean
If this plays out, it is a risk-off shock. To meet gilt margin calls, UK pensions sell global equities and credit, transmitting the LDI shock internationally as the BoE warned in its 2022 Financial Stability Report. The trigger decomposes into signed root‑shocks — Credit spreads ▲ · Financial conditions ▲ · Risk appetite ▼ · Risk-parity deleveraging ▲ — which propagate through our causal graph to the markets below.