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The majority of UK investors lack faith in the British government’s ability to rebuild the economy post-pandemic, new research conducted on behalf of HYCM has found.

The trading broker commissioned an independent survey of 1,479 UK-based investors, all of whom have investments worth in excess of £20,000, excluding their property, savings, and workplace pensions. It found that three in five (60%) do not believe that Boris Johnson and the UK Government have handled the pandemic competently.

A similar number (59%) said they lack faith in the Government’s ability to tackle the record levels of public debt accrued throughout the crisis.


Wealthy investors still back Sunak

Meanwhile, just under half (48%) believe Rishi Sunak is the right person to be the Chancellor of the Exchequer. However, Sunak does appear to have the backing of wealthier investors, as this figure increases to 70% among those with portfolios worth in excess of £1 million.

Elsewhere, just 43% of those surveyed said they had faith generally in the economic of the current UK Government, which could influence the assets or markets they target for trades.

Half (49%) of UK investors said they are concerned about the potential of acute economic austerity over the coming years due to the fallout from the pandemic.

Giles Coghlan, Chief Currency Analyst, HYCM, said: “As recent policy reforms would suggest, the government is already taking significant action to repay the large level of public debt accumulated during the pandemic. Consequently, the UK is now approaching an interesting juncture when it comes to its post-pandemic recovery – and clearly, some investors are worried. Expect this to impact trading strategies and the assets that investors or traders choose to back.”

Given the fact that recent changes have little precedent outside of a budget, HYCM’s research shows that a large number of investors are faltering when it comes to their trust in Boris Johnson’s government. The UK’s debt to GDP ratio has almost doubled since the 1970s, and is well above the European average – investors will be mindful that the UK now owes more money than it prints.

“With numerous changes already in the offing, from taxation reforms to national insurance policy overhauls, traders and investors will no doubt be adjusting their strategies accordingly,” Coghlan added. “But despite the uncertainty, some analysts are predicting that the FTSE 100 could still offer better value for medium-term buyers than US stocks. As such, investors should monitor any developments closely before making any hasty changes to their portfolio.”

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Please note this article does not constitute investment advice. Investors are encouraged to do their own research beforehand or consult a professional advisor.

Stuart Fieldhouse

Stuart Fieldhouse

Stuart Fieldhouse has spent 25 years in journalism and marketing, including as a wealth management editor for the Financial Times group, covering capital markets and international private banking, and as an investment banking correspondent for Euromoney in Hong Kong. He was the founder editor of The Hedge Fund Journal.

Stuart has worked at CMC Markets, supporting the re-launch of its global financial spread betting and CFD trading platforms. He is also the author of two books on trading, published by Financial Times Pearson. Based in The Armchair Trader’s London office, Stuart continues to advise fund managers, private banks, family offices and other financial institutions.

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