Investor confidence in PM's recovery plan falters

·2 min read
Boris Johnson
UK prime minister Boris Johnson. Photo Credit: Chris Kleponis/Sipa USA

A new survey of investors has found that the majority lack faith in the government’s ability to tackle record levels of public debt and rebuild the economy post-pandemic. 

Forex platform HYCM surveyed 1,479 UK investors — all of whom have more than £20,000 ($27,292) invested. Some 60% of that number do not think Boris Johnson and the government have handled the pandemic competently.

Some 59% also lack faith in the government’s ability to tackle record levels of public debt. 

Meanwhile, just under half (48%) believe Rishi Sunak is the right person to be chancellor. 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 £1m.

The UK economy is at a critical juncture as the country emerges from the COVID-19 pandemic, post-Brexit stresses are borne out, and the furlough scheme comes to an end. 

Elsewhere, just 43% of those surveyed said they had faith generally in the economic policy 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.

Read more: Women disproportionately affected by £1bn state pension blunder

"The UK is now approaching an interesting juncture when it comes to its post-pandemic recovery — and clearly, some investors are worried," said Giles Coghlan, chief currency analyst at HYCM. "Expect this to impact trading strategies and the assets that investors or traders choose to back."

Coghlan also notes that 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," he said. 

"Some analysts are predicting that the FTSE100 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.”

Watch: What is inflation and why is it important?

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