What if sterling trades at a persistent stagflation discount and amplifies UK import costs?
Sterling trades at a persistent risk discount as markets price UK stagflation, with GBP underperforming on a real-effective basis and amplifying imported-cost pressures.
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. Sterling trades at a persistent risk discount as markets price UK stagflation, with GBP underperforming on a real-effective basis and amplifying imported-cost pressures. The trigger decomposes into signed root‑shocks — US dollar (DXY) ▲ · Growth surprise ▼ · 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 | ▼ -0.9% hist -1.01–-0.49% · other way +31.9% (n=12) |
| 2 | Solana SOLon Hyperliquid 📈 chart | Crypto | ▼ -0.7% hist -2.59–+1.64% · other way -0.48% (n=12) |
| 3 | Hyperliquid (HYPE) HYPEon Hyperliquid | Crypto | ▼ -0.6% model prior · unmeasured |
| 4 | Nasdaq 100 NDXon Hyperliquid 📈 chart | Index | ▼ -0.6% hist -0.75–+0.3% · other way -0.56% (n=12) |
| 5 | US dollar (DXY) DXYon Hyperliquid 📈 chart | FX | ▲ +0.6% hist -0.3–+1.29% · other way +0.47% (n=12) |
| 6 | EUR/USD EURUSDon Hyperliquid 📈 chart | FX | ▼ -0.6% hist -1.98–+0.71% · other way -0.56% (n=12) |
| 7 | Ether ETHon Hyperliquid 📈 chart | Crypto | ▼ -0.5% hist -0.67–-0.28% · other way +4.46% (n=12) |
| 8 | Bitcoin BTCon Hyperliquid 📈 chart | Crypto | ▼ -0.5% hist -2.07–+1.47% · other way +7.54% (n=12) |
| 9 | GBP/USD GBPUSDon Hyperliquid 📈 chart | FX | ▼ -0.4% hist -2.24–+0.54% · other way -0.74% (n=12) |
| 10 | Volatility (VIX) VIXon Hyperliquid 📈 chart | Vol | ▲ +0.4% hist -1.66–+2.19% · other way -1.26% (n=12) |
| 11 | Tech sector XLK 📈 chart | Equity | ▼ -0.4% hist -1.49–+1.18% · other way -0.47% (n=12) |
| 12 | Turkish lira TRY 📈 chart | FX | ▼ -0.4% hist -6.97–+5.91% · other way -0.47% (n=12) |
| 13 | Gold XAUon Hyperliquid 📈 chart | Commodity | ▼ -0.3% hist -2.91–+1.42% · other way +0.47% (n=12) |
| 14 | Indian rupee INR 📈 chart | FX | ▼ -0.4% hist -1.23–+0.55% · other way -0.1% (n=12) |
Probable recommendation
Historical precedent — what analogous events actually did
Across 16 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 |
|---|---|---|---|---|---|---|
| GBPUSD GBPUSD | SHORT | -1.9% · 5d -0.7% | 100% | 6 | 0.79 | ✓ matches cascade |
| AUD AUD | SHORT | -1.9% · 5d -0.4% | 83% | 6 | 0.52 | ✓ matches cascade |
| EURUSD EURUSD | SHORT | -1.6% · 5d -0.5% | 83% | 6 | 0.50 | ✓ matches cascade |
| Gold XAU | SHORT | -2.7% · 5d -2.3% | 83% | 6 | 0.50 | ✓ matches cascade |
| NDX NDX | LONG | +0.6% · 5d -0.1% ↺ fades | 75% | 8 | 0.38 | ⚠ differs |
| SPX SPX | SHORT | -3.3% · 5d -2.0% | 67% | 16 | 0.31 | ✓ matches cascade |
| USDJPY USDJPY | SHORT | -0.1% · 5d +0.2% ↺ fades | 67% | 6 | 0.28 | ⚠ differs |
| INR INR | SHORT | -1.0% · 5d +0.6% ↺ fades | 67% | 6 | 0.27 | ✓ matches cascade |
| COIN COIN | LONG | +11.6% · 5d +3.7% | 67% | 3 | 0.27 | ⚠ differs |
| SMH SMH | LONG | +3.2% · 5d +0.5% | 67% | 6 | 0.25 | ⚠ differs |
| XLK XLK | LONG | +1.6% · 5d -0.4% ↺ fades | 67% | 6 | 0.23 | ⚠ differs |
| SOL SOL | LONG | +2.3% · 5d -5.6% ↺ fades | 67% | 3 | 0.20 | ⚠ differs |
| High-yield credit HYG | LONG | +0.5% · 5d +0.1% | 67% | 6 | 0.20 | · |
| 30y yield DGS30 | LONG | +16bp · 5d +5bp | 59% | 13 | 0.17 | ✓ matches cascade |