An Investor Confidence Index compiled by Hargreaves Lansdown based on its 1.2m client base, showed investors holding steady in May.

The index measures the confidence of retail investors in the UK stock market over the next 6 months, 1 year and 3 years. It hit 80 points again this month, having been as low as 52 December 2018. The average for the year is 68, while the 10 year average is 91. 

Investor confidence rose in all markets except Europe, where economic weakness has pushed sentiment lower.

Laith Khalaf, senior analyst at Hargreaves Lansdown believes investors are reserving judgement on the direction of markets until there is a clear line on Brexit.

He added: “Sentiment towards other global markets is still more robust than towards the domestic market, with the notable exception of European shares which sit at the bottom of the pecking order. This is also reflected in the latest industry fund sales data, which show consistent outflows from UK and European funds as investors place their chips elsewhere.

“The failure of cross-party Brexit talks has meant the pound has come under renewed pressure, and this vindicates the decision to invest overseas. However the future path of the currency is heavily linked to Brexit, and seeing as no-one knows quite how that will play out, it makes sense to retain some domestic exposure in case the pound surprises on the upside.”

Investors are most confidence about Asia Pacific and global emerging markets, where growth looks stronger and valuations more appealing.