EXCL – UK investors abandon Sunak and Hunt as only one in four have faith in Tory economic policy
Just over one in four UK investors have faith in Tory economic policy, with the majority concerned about slowing economic growth, according to new research shared exclusively with City A.M. today.
In fact, less than a third believe Jeremy Hunt is the right person to be chancellor.
Just 27 per cent have confidence in the Conservative party’s economic policies, with only 22 per cent believing the measures announced in the recent Autumn Statement will have a positive impact on their investments, City broker HYCM found.
However, almost half think the Government is right to raise taxes and cut spending to tackle the budget deficit.
Further, 58 per cent said rising interest rates and inflation are their biggest concerns.
When asked about their investment activities over the past six months and their priorities when managing their portfolio, half said having investments they can quickly and easily trade or withdraw was important.
Similar numbers (45 per cent) are avoiding making long-term investment decisions due to continued political and economic uncertainty.
The survey showed that just 26 per cent of UK retail investors are satisfied with their investment returns over the last six months.
Despite market volatility, only a fifth have shifted their investment strategy to more traditionally stable assets, such as gold and bonds.
Looking ahead, 37 per cent are more likely to diversify their investments in 2023 to ensure they can perform well in a range of potential scenarios.
“After a turbulent six months in UK politics, the financial markets have seen unprecedented levels of volatility,” remarked Giles Coghlan, Chief Market Analyst, HYCM.
“Three prime ministers, four chancellors, a disastrous mini-budget, and inflation still surging despite successive interest rate hikes. UK investors are suffering a crisis of confidence in the Government.“Giles Coghlan, Chief Market Analyst, HYCM
“Interestingly, around four in five investors are not planning on decreasing their holdings in stocks and shares investments, despite the threat that raging inflation poses to their portfolios, Coghlan continued.
“If the UK has a deeper recession than is currently forecast, the wealth effect and the risk of a sharp capitulation in stock positions could inflict a significant amount of damage.”
He added: “With this in mind, at what point will those investors move away from stocks? Ironically, it could create the perfect conditions to buy when the panic selling begins.”