UK investors pop the ‘patriotic bubble’
According to research by Schroders European Wealth Index, almost nine in ten UK investors expect various financial issues to cause them concern over the next year.
One of the biggest worries is the impact of inflation and how they will cope with the prospect of rising taxes coupled with austerity measures.
The ‘patriotic bubble’, the forecast economic impact of both the Queen’s Diamond Jubilee celebrations and this summer’s Olympic games, caused widespread debate on whether it will give the economy a much-needed boost to the economy and consumer confidence, with the new data suggesting that affluent investors still have significant concerns over the state of the economy and wider investment outlook.
Peter Beckett, head of international marketing at Schroders, said: “Whilst this summer’s patriotic events give people reason to feel upbeat, investors have not taken their eyes off important economic realities. Our research shows that investors across Europe have taken steps in the last year to take more control over their financial planning.
“While this is positive, our new data also underlines that investors are still living with unprecedented economic uncertainty and this shows in their financial worries looking ahead. The ability to achieve growth on investments and improve returns are the overriding issues for many UK investors and exploring new opportunities to make money work harder continues to be important.”
The UK was among the top three countries across Europe with the highest proportion of investors who expected financial issues to cause them concern over the coming year (88%). Italy came top (91%) followed by Spain (88%). At the other end of the scale only 8% of UK investors expected to be concerned about how to manage their debts.
This comes as an overwhelming majority of financial advisers and investment intermediaries in the UK attribute the Eurozone debt crisis as the most significant threat to economic growth in the next six months, according to the latest report from Barings Investment.
Rod Aldridge, head of UK retail distribution at Barings, said:
“It’s not surprising that advisers see the Eurozone debt crisis as the biggest threat to macroeconomic growth over the coming six months. These latest barometer results suggest they are focused on looking for other opportunities for their clients, and some of their favoured options seem to be emerging markets, Asian economies and the US.”