Will the United Kingdom agree to or announce the adoption of an inflation index other than CPI for the Renewables Obligation buy-out price before Jan 1, 2028?
Prediction markets currently give a 21% probability that Will the United Kingdom agree to or announce the adoption of an inflation index other than CPI for the Renewables Obl.... This contract trades at 21¢ on Kalshi, closing January 1, 2028. This illiquid market with only $310 open interest and zero 24-hour volume shows extreme asymmetry, with Yes holders facing a 331% annualized yield versus just 10.3% for No—a 32x differential suggesting either severe underpricing of tail risk or minimal conviction from market participants.
Analysis
This illiquid market with only $310 open interest and zero 24-hour volume shows extreme asymmetry, with Yes holders facing a 331% annualized yield versus just 10.3% for No—a 32x differential suggesting either severe underpricing of tail risk or minimal conviction from market participants. The 6-cent spread on a 21-cent price and moderate cliff risk score (6/10) indicate uncertainty about whether this niche UK energy policy change will materialize within the 624-day window. The neutral regime and low probability pricing suggest the market views a CPI alternative adoption as unlikely, though the outsized Yes yield implies some tail scenario recognition.
Resolution rules
If the United Kingdom agrees to or announces the adoption of an inflation index other than CPI for the Renewables Obligation buy-out price before Jan 1, 2028, then the market resolves to Yes.
Indicators
Regime
Trade
sf trade KXUKRENEWOB-28JAN01-INDX yes 100