According to a survey conducted by CityWire, wealth managers cited uncertainties over the election outcome, and composition of the next government, as creating a negative short-term view on UK securities.

Mark Slater of Slater Investments summed up general sentiment saying, “there is uncertainty, whatever the outcome of the election.”

Should the Conservatives win enough seats to form a coalition government, the UK faces the prospect of a referendum on its continued membership of the EU, the country’s largest trading partner; should Labour prevail, higher taxes, the closure of loopholes around non-doms and a freeze on prices could make the UK a much less attractive investment proposition. Either way, the next government has the capacity to provoke uncertainty in the markets – and, as Peter Lowman of Investment Quorum notes, “uncertainty is the markets’ worst enemy.”

“A hung parliament is seen as inevitable,” remarked Heather Maizels of Victoria Private Office. “Disruption will likely disruption to follow.”

Overall, more than a third of managers said the election and political risks were the issues that were most worrying clients. Almost half (47 per cent) explicitly listed sterling rates as their biggest concern for the year ahead.

The report follows news that foreign investors have been selling UK gilts at a pace unseen since the nadir of the financial crisis six years ago. According to figures issued yesterday by the Debt Management Office, non-residents sold £14bn worth of gilts during the first two months of this year.

Japanese financial holding firm Nomura has announced that Japanese investors are universally rejecting UK gilts, and RBS analysts have recommended selling gilts and buying put options on sterling expiring in June.