Investor confidence index drops to four-year low after Brexit vote

 
William Turvill
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British Money
The UK voted to leave the European Union on 23 June (Source: Getty)

Investor confidence has hit a four-year low after the EU referendum result, according to one index.

The Hargreaves Lansdown Investor Confidence Index experienced its sharpest monthly fall in five years at the end of June.

The index fell from 92 points in May to 67 on 30 June, its lowest value since May 2012, a time when “Greece looked like it might be on the brink of leaving the Eurozone”.

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“The immediate response to Brexit appears to be a collapse in confidence, across investors, consumers and businesses,” Hargreaves Lansdown senior analyst Laith Khalaf said.

“Investors are naturally twitchy about what Brexit means for the future of the stock market in the coming months and years. However continued low interest rates will remain supportive of shares, not least because there is really nowhere else for investors to go for income. Commercial property is one other option, though we have seen problems that can arise for investors in that market over the last week or so.”

But he cautioned against “assigning too much significance to one month’s survey data, particularly so close to the EU referendum”. Hargreaves Lansdown surveyed 190 retail investors on 30 June for the index.

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UK-based investors’ short-term confidence – looking forward one year – shrunk further in Europe, down 10 per cent to 43.3 per cent, than the UK itself, which was down five per cent to 52.3 per cent.

Confidence in all other regions – Asia Pacific, emerging markets, Japan and North America – was up between May and June.

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