Investor confidence in the UK has sunk five per cent in July, as ‘Freedom Day’ renews pandemic uncertainty across the country, according to new research.
The UK’s investor confidence lags behind that of the rest of the world, which averages dips of two per cent, data from Hargreaves Lansdown found.
“Far from bringing an added dose of confidence to investors, ‘Freedom Day’ appears to be a setback,” senior investments and markets analyst at Hargreaves Lansdown, Susannah Streeter, said.
As Covid-19 cases rise across the country amid the easing of most restrictions and the so-called ‘pingdemic’, stakeholders have been spooked by the UK’s mounting uncertainty.
“Already many industries from hospitality to manufacturing are struggling to cope with high levels of absence as staff are pinged by the test and trace app, leading to the closure of some venues and a drop in output,” Streeter explained.
The UK’s looming £10bn inflation bill has also thrown London’s market out of whack, alongside sudden shifts to travel rules.
“The confusion surrounding quarantine and testing rules for international travel is also leading to fresh uncertainty about the prospects for the aviation and tourism industries, which have been struggling through the worst crisis in their history,” she said.
France was placed under new ‘amber plus’ quarantine rules in a last-minute government U-turn on Saturday, which “has thrown holiday plans into fresh mass chaos”, Streeter continued.
An increasing number of investors are also hedging their bets on interest rates rising in a year’s time.
This month, 65 per cent of investors expect interest rates to swell over the next 12 months, compared with 60 per cent in June, according to Hargreaves Lansdown’s data.
Meanwhile, 26 per cent of investors believe interest rates will rise in six months, compared to 24 per cent in June.