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Big downturn seen in investors’ confidence

Investor confidence took a significant dip last month, according to Hargreaves Lansdown’s index of investor risk appetite.

It shows that confidence slid by 17 points in March to a rating of 61 compared with 78 in February. Only 6 per cent of respondents say the UK stockmarket is very likely to be higher in six months while 14 per cent think it is likely.

Looking ahead 12 months, 39 per cent believe it is likely that the market will be higher. and just 11 per cent say it is very likely to be higher. Thirty-six per cent say it is very likely that the market will be back on track in three years while 50 per cent think it is likely.

Ten per cent expect interest rates to be higher in six months while 22 per cent believe it will be a year before the Bank of England raises rates. Sixty-five per cent say rates in three years will be higher than 5.25 per cent – the level of base rate at the time the survey was conducted.

Investors are most likely to invest in stocks and shares over the next year, with 38 per cent choosing this asset class. Twenty-seven per cent say they will invest through unit trusts, compared with 22 per cent in February, while 21 per cent will invest directly in shares, down from 24 per cent.

Investment manager Ben Yearsley says: “It is worrying that investor confidence has drop-ped so much in the last six to eight weeks. The research shows that people are very nervous about the state of the market over the next six to 12 months.”

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