What if a twin deficit shock sends sterling toward 1.10 against the dollar?
A twin deficit and fiscal-credibility shock drives GBP/USD toward 1.10, reviving 2022-style sterling-crisis dynamics and importing inflation into the UK economy.
how we built this number — every step
The class rate is measured from our dated, sourced event library (decade-normalized Poisson — the full table is public at base_rates.json). The variant’s share within its class is the analyst’s editorial call, published so you can audit it. A wider range means thinner precedent. Full recipe: methodology · scored at Reality Check.
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 (gold) over time vs the crowd's (Polymarket, blue), from the past toward the 6–18 months 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. The gold path is an illustrative reconstruction anchored to today's estimate — real dated events, not a live re-estimate history.
What it would mean
If this plays out, it is a risk-off shock. A twin deficit and fiscal-credibility shock drives GBP/USD toward 1.10, reviving 2022-style sterling-crisis dynamics and importing inflation into the UK economy. The trigger decomposes into signed root‑shocks — US dollar (DXY) ▲ · Credit spreads ▲ · Inflation surprise ▲ · Risk appetite ▼ — which propagate through our causal graph to the markets below.
If it happens — the markets it would move
Biggest moves first. Projected moves are cascade-model priors; hist A–B% = what comparable past events actually did (measured abnormal returns), and model prior · unmeasured marks markets with no analogue backing yet. Tap any market for its price history.
| Market | Class | Projected move | |
|---|---|---|---|
| 1 | MicroStrategy MSTRon Hyperliquid 📈 chart | Equity | ▼ -1.2% hist -6.31–+0.87% · other way +31.87% (n=12) |
| 2 | Solana SOLon Hyperliquid 📈 chart | Crypto | ▼ -0.8% hist -7.9–+5.43% · other way -2.3% (n=11) |
| 3 | Nasdaq 100 NDXon Hyperliquid 📈 chart | Index | ▼ -0.7% hist -0.67–-0.14% · other way -0.08% (n=12) |
| 4 | US dollar (DXY) DXYon Hyperliquid 📈 chart | FX | ▲ +0.7% hist -0.01–+0.99% · other way +1.04% (n=12) |
| 5 | Bitcoin BTCon Hyperliquid 📈 chart | Crypto | ▼ -0.7% hist -3.3–+1.83% · other way +7.7% (n=11) |
| 6 | Hyperliquid (HYPE) HYPEon Hyperliquid | Crypto | ▼ -0.6% model prior · unmeasured |
| 7 | EUR/USD EURUSDon Hyperliquid 📈 chart | FX | ▼ -0.6% hist -1.57–+0.28% · other way -1.36% (n=12) |
| 8 | Ether ETHon Hyperliquid 📈 chart | Crypto | ▼ -0.6% hist -3.16–+1.99% · other way +4.16% (n=11) |
| 9 | Volatility (VIX) VIXon Hyperliquid 📈 chart | Vol | ▲ +0.5% hist -1.47–+3.65% · other way -7.61% (n=12) |
| 10 | Turkish lira TRY 📈 chart | FX | ▼ -0.6% hist -1.42–+0.32% · other way -0.73% (n=12) |
| 11 | GBP/USD GBPUSDon Hyperliquid 📈 chart | FX | ▼ -0.5% hist -0.85–+0.05% · other way -0.78% (n=12) |
| 12 | Tech sector XLK 📈 chart | Equity | ▼ -0.5% hist -0.57–+0.41% · other way +0.02% (n=12) |
| 13 | Indian rupee INR 📈 chart | FX | ▼ -0.5% hist -0.82–+0.08% · other way -0.66% (n=12) |
| 14 | High-yield credit HYG 📈 chart | Rate | ▼ -0.4% hist -0.63–+0.02% · other way -0.23% (n=12) |
Probable recommendation
Historical precedent — what analogous events actually did
Across 35 analogous events (overlap‑weighted), as abnormal returns — market beta stripped, so it's the event's own effect, not the market backdrop. Shown at 20 days (persistent) and 5 days (immediate); ↺ fades = the two horizons disagree. Confidence = consistency × sample × significance.
| Asset | History says | Abnormal (20d · 5d) | Hit | n | Confidence | vs cascade |
|---|---|---|---|---|---|---|
| KRW KRW | SHORT | -1.8% · 5d +0.1% ↺ fades | 70% | 23 | 0.37 | ✓ matches cascade |
| MSTR MSTR | SHORT | -5.0% · 5d -3.2% | 71% | 24 | 0.32 | ✓ matches cascade |
| COIN COIN | LONG | +4.2% · 5d +7.2% | 67% | 6 | 0.25 | ⚠ differs |
| AVGO AVGO | LONG | +4.5% · 5d -0.6% ↺ fades | 62% | 16 | 0.23 | ⚠ differs |
| SOL SOL | SHORT | -7.7% · 5d -9.8% | 67% | 6 | 0.22 | ✓ matches cascade |
| High-yield credit HYG | SHORT | -0.4% · 5d +0.0% ↺ fades | 64% | 22 | 0.22 | ✓ matches cascade |
| AUD AUD | SHORT | -0.9% · 5d +0.2% ↺ fades | 61% | 23 | 0.21 | ✓ matches cascade |
| JPM JPM | SHORT | -0.6% · 5d -1.6% | 62% | 29 | 0.21 | ✓ matches cascade |
| SMH SMH | LONG | +2.0% · 5d -0.9% ↺ fades | 62% | 24 | 0.21 | ⚠ differs |
| Bitcoin BTC | SHORT | -2.9% · 5d -3.4% | 62% | 8 | 0.20 | ✓ matches cascade |
| GBPUSD GBPUSD | SHORT | -0.6% · 5d -0.2% | 61% | 23 | 0.19 | ✓ matches cascade |
| MU MU | LONG | +3.1% · 5d -3.6% ↺ fades | 59% | 27 | 0.16 | ⚠ differs |
| AMD AMD | SHORT | -0.5% · 5d -1.9% | 59% | 29 | 0.13 | ✓ matches cascade |
| EURUSD EURUSD | SHORT | -1.2% · 5d -0.3% | 57% | 23 | 0.12 | ✓ matches cascade |