The British political landscape is causing UK-based investors to be the most “bearish” in Europe, a survey by UBS Global Wealth Management found.
UBS also found less than one in three (28%) UK investors were optimistic about the outlook for the European economy in 2019, though 53% of their Emea counterparts were.
The survey, which covered nearly 3,500 investors worldwide, found that over half (55%) of those based in the UK were mostly concerned by the domestic political situation in the UK. Around 43% of Europe, Middle East and Africa (Emea) investors were worried about the political situation in Europe .
Among those respondents to the survey who identified themselves as business owners, 25% in the UK were pessimistic about the future for their businesses, compared to 12% of business owners in Europe.
Lacking market confidence
UK investors are now being advised to maintain sterling and UK-based asset exposure to benchmark levels, as 47% of those surveyed showed low confidence in the FTSE for the first half of 2019.
“As we get closer to the UK’s official departure from the EU at the end of March, this survey shows that political turbulence is dragging on investor sentiment in the UK compared to the rest of the region,” said Nick Tucker, head of UK domestic at UBS Wealth Management.
“UK investors seem to have dramatically lowered expectations for 2019 in almost every sense, from expected financial returns to their outlook for the economy.
“From our conversations with clients up and down the country, we know that investors are anxious. Nevertheless, UBS’s advice is to maintain exposure to sterling-denominated assets at benchmark levels until more clarity emerges.”
While some European investors are worried about some local markets such as Italy, sentiment in the UK took “the hardest hit”, Tucker added.
