Investor Confidence Falls As Inflation Soars

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  • The HL Investor Confidence index has dropped by 10 points this month, down to 57
  • Confidence has fallen in all global sectors, the largest drop being the North American sector, which fell by 20 points
  • Confidence in UK Economic growth has dropped by 4 points

Investor Confidence Hit Hard By Inflation Fears

Emma Wall, Head of Investment Analysis and Research:

“Rising inflation, political uncertainty and growing concerns about a global recession has hit investor confidence hard this month. Across the globe, central banks are raising interest rates in a bid to stem inflation – but with so much out of policy committee’s control, the immediate outlook remains bleak. The war in Ukraine continues to dominate prices, markets and the economic outlook.

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Over the weekend, Russia and Ukraine signed a deal which would allow grain to be exported from Ukrainian ports which immediately saw wheat prices fall to levels last seen pre-invasion. Yesterday, President Putin ordered attacks on the one of the ports, causing wheat prices to rise again – and signalling to the world that the war – and associated political and price uncertainty – is far from over.

Global investors have responded by selling out of equity funds, instead looking to lower-risk assets. Amongst the most bought funds on the HL platform this month have been both money market funds, and multi-asset funds invested for capital preservation, such as Troy Trojan, and the Personal Assets investment trust.”

Investor Confidence index

The investor confidence index is compiled by surveying HL clients on a monthly basis. Each month we send the investors’ confidence survey to 6,000 random clients and there is a representative split of our clients by age. On average around 10% of clients respond.

Investor Confidence – UK score

Investor Confidence – Global Sectors

About Hargreaves Lansdown

Over 1.7 million clients trust us with £132.3 billion (as at 30 April 2022), making us the UK’s number one platform for private investors. More than 98% of client activity is done through our digital channels and over 600,000 access our mobile app each month.

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