Only a quarter of UK retail investors have faith in Tory economic policy, with the majority concerned about slowing economic growth, research commissioned by HYCM has found.
What were the findings of HYCM’s survey?
The CFD broker commissioned a survey of 721 UK-based investors, all of whom have investments in excess of £10,000, excluding savings, pensions and residential property. It found that less than a third (30%) believe Jeremy Hunt is the right person to be chancellor.
Just 27% have confidence in the Conservative party’s economic policies, with only 22% believing the measures announced in the Autumn Statement will have a positive impact on their investments. But 48% think the Govt is right to raise taxes and cut spending to tackle the budget deficit. 58% 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, 48% said having investments they can quickly and easily trade or withdraw was important. Similar numbers (45%) are avoiding making long-term investment decisions due to continued political and economic uncertainty.
However, just 26% of retail investors are satisfied with their investment returns over the last six months. Despite market volatility, only a fifth (21%) have shifted their investment strategy to more traditionally stable assets, like gold and bonds. 37% are likely to diversify investments in 2023 to ensure they can perform well in a range of potential scenarios.
A survey of 721 UK-based retail investors has revealed their sentiments towards the Government, and how they are managing their portfolios in the current climate:
- Only 30% believe Jeremy Hunt is the right person to be Chancellor
- Even fewer (27%) have confidence in the Government’s economic policies
- 48% of investors are looking to easily tradable investments to counter economic turbulence
What were HYCM’s thoughts on the findings?
Giles Coghlan, Chief Market Analyst, HYCM, said: “After a turbulent six months in UK politics, the financial markets have seen unprecedented levels of volatility. Three prime ministers, four chancellors, a disastrous mini-budget, and inflation still surging despite successive interest rate hikes – the survey shows UK investors are suffering a crisis of confidence in the Govt.”
“Around four in five investors (79%) are not planning on decreasing their holdings in stocks and shares investments, despite the threat that raging inflation poses to their portfolios.”
“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. 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,” Giles Coghlan further added.
“Although things have somewhat calmed since Hunt delivered his Autumn Statement, many investors would still benefit from exploring options – whether it means looking to safe haven assets or diversifying their investments to boost returns as the UK weathers a recession.”