Shock Inference Lab

UK mini-budget — Truss / Kwarteng

2022-09-23 · United Kingdom · fiscal · severity 5/5

Unfunded £45bn tax cuts trigger LDI doom-loop; 30Y gilt +120bp in days; BoE forced to intervene.

Pre/post market reaction

Window	GB 10Y Δ	DE 10Y Δ	Spread Δ
1d	0.00pp	0.00pp	0.00pp
1w	0.00pp	0.00pp	0.00pp
1m	+0.92pp	+0.15pp	+0.77pp
3m	+1.03pp	+0.36pp	+0.67pp

Yields at monthly resolution; sub-month windows interpolated. pp = percentage points.

Fiscal credibility shock

Large local yield spike inconsistent with global trend.

no-signal

confidence: high

No abnormal yield movement detected after factor-model controls.

Early warning40/100

Abnormal yield move before the event (90d proxy).

Reaction83/100

Abnormal yield move after the event (1m / 3m).

Constraint49/100

Lead/lag band: reactive.

Amplification23/100

Post-event move beyond pre, on a crisis backdrop.

Confidence100/100

Severity × benchmark coverage × data coverage.

v1 scores use a simple factor model on monthly yields. See docs/METHODOLOGY.md.

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