Brexit concerns and expectations that interest rates will rise have caused UK investor confidence to fall in July, according to two separate indices.
The Hargreaves Lansdown Investor Confidence Index fell 20%, from 86 points last month to 69 points in the latest reading. The long-term average level for the index is 99.
Meanwhile, expectations for an interest rate rise have increased significantly. Forty four per cent of investors thought there would be a rate rise in the next six months, up from 16% in June.
Some 81% of investors thought rates would rise within 12 months, up from 54% in June.
According to another investor survey – the Lloyds Bank Investor Sentiment Index – sentiment towards eight out of 11 asset classes fell this month. UK asset classes in particular have lost favour among investors. UK equities were the biggest faller, from 13.5% to 2.75%.
Markus Stadlmann, chief investment officer at Lloyds Private Banking, said: “It appears that investors are feeling less confident following the UK General Election. In May, we saw investor sentiment reaching levels not recorded since April 2016, but this month’s sharp decline – particularly towards UK assets – suggests that the election outcome and ensuing political dynamics have caused uncertainty in the markets.”
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