Potential no-deal Brexit knocks investor confidence

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Aug 22, 2019

Investor sentiment has been knocked by the prospect of a no-deal Brexit, a poll from Interactive Investor shows.

The survey – of 404 savers at the beginning of August – shows 41 per cent say they have an investment strategy in place and are sticking to it despite the ongoing uncertainty surrounding the UK’s exit from the EU.

This is down from 53 per cent who were polled in March, suggesting investors are feeling less certain about the best course of action as we approach the 31 October deadline.

There has also been a notable fall in investors deciding to filter out ‘market noise’ and take a longer-term view, with 23 per cent in August compared with 32 per cent in March.

Interactive Investor says as uncertainty around the Brexit gridlock has continued over the past three years, more investors are “getting tired” of putting their investment decisions on hold.

Just 18 per cent said they would not invest until a firm decision has been made on Brexit, down from 25 per cent in March, and significantly lower than 38 per cent in December 2018.

One in four survey respondents say they are holding fewer UK exposed stocks over fears of what could happen to sterling if we leave without a deal.

Head of investment Rebecca O’Keeffe says: “Investing in non-UK assets has been a very rewarding strategy since the EU referendum, with investors benefiting from the weakness in sterling – and higher returns in global markets. Should the UK crash out of the EU without a deal, sterling may fall even further from its current low level, so it is no surprise that almost a quarter of investors polled said they are holding less in UK assets.”

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