Investors have less confidence now about the UK markets than they had were in the wake of the Brexit vote or the UK snap general election, according to the latest information coming from the Lloyds Private Bank Investor Sentiment Index (LPBIS).

Investors kept away from the UK in the month of December, as the dark cloud of doubt hovered over the country in relation to Brexit negotiations and the long term implications.

The UK equity markets took the biggest hit, falling 3.20 percentage points (pp) in investors’ estimation to 1.55% between August and September, its lowest point for 18 months. The change in net sentiment for the asset class year-on-year was -14.23pps.

Investors were also reluctant and less confident about buying UK government and corporate bonds, which registered net sentiment of -5.20% and -4.26% for September, 2.92pp and 2.27pp worse than the previous month, respectively.

Storms ahead

“With autumn rapidly closing in, it appears that UK investors are bracing themselves for stormier conditions ahead,” noted Markus Stadlmann, chief investment officer at Lloyds Private Banking.

“Although the scores make for gloomy reading, we think the drop in sentiment towards UK assets reflects the perception of expected investment risk.

“While the UK economy is fundamentally strong, and there is currently nothing to be overly concerned about, investors are uncertain about the prospects of investing in UK shares, bonds and property for the medium and long term.”

Gold had the biggest increase in investor sentiment, rising 2.67pp between August and September.

“Our monthly index has followed something of an unsteady course so far this year,” said Stadlmann.

“It was only three months ago when we were seeing record sentiment highs, but the ride since then has been bumpy. Investors should stay calm.”

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