Nearly half of UK investors POSITIVE about Brexit, two fifths fearful of Trump and a staggering 73% lack faith in Theresa May Seven million investors believe UK entrepreneurs will drive the economy back to strength
New research among 1,000 UK investors by IW Capital uncovers the true impact of 2016’s triple threat of political shocks and their direct effect on the UK investor community, finding:
- 2.21 million investors are entering 2017 with a greater risk appetite, thus seeking new investment classes
- One in ten investors feel the shock political events of 2016 will influence their investment decision this year more than any other factor
- 36% of investors think record-low interest rates will negatively impact their 2017 investment strategy, with 26% saying this issue is the single biggest risk to their investments
- 44% of investors – nearly 11 million people across the UK – believe that Brexit will have a positive impact on their investment strategy in 2017
- However, 44% of investors are worried about the impact of Donald Trump’s Presidency on their investments
- Just 27% said they have faith in Theresa May’s capability to promote investment value as part of a post-Brexit government
- 3.19 million investors are re-evaluating their investment plans in light of interest rates residing at 0.25%
- 27% – 6.62 million investors – believe entrepreneurs will play a critical role in driving private sector growth
After a number of political and economic shocks in 2016, London-based investment firm IW Capital has conducted new research revealing how these significant events have affected investment decisions across the nation. In an independent, nationally representative survey of 1,000 Brits who have between £10,000 and over £250,000 worth of investments – not including properties or pensions – IW Capital found that investors believe Brexit will actually have a positive impact on their investment strategies in 2017, but are fearful of both the UK’s and US’s new political leaders.
In light of the historic developments of last year, including the EU referendum, a new-look British government, and Donald Trump’s US Presidential election victory, the study uncovered that 2.21 million UK investors are entering 2017 with a greater risk appetite and are currently seeking new investment classes. Moreover, an even greater number (2.45 million investors) said that the landmark political events of 2016 will influence their investment decision this year more than anything else.
Despite much speculation on what the EU referendum result would mean for Britain’s private sector, two fifths (44%) of investors polled said they feel Brexit will actually have a positive impact on their investment plans in the year ahead. However, the same number (44%) think that Donald Trump will be detrimental to their 2017 investments, while only a quarter (27%) of the UK’s investors stated that they have faith in Theresa May’s capability to promote investment value as part of a post-Brexit government.
Interest rates also featured prominently on investors’ list of concerns. On 4 August 2016, the Bank of England (BoE) cut interest rates to 0.25% – the lowest they have ever been – and on 2 February 2017 it announced that it would be holding the rates at this record-low, despite further upward revisions for the UK’s 2017 economic growth forecasts. The BoE’s decision has evidently impacted the country’s investors; 36% of those surveyed – the equivalent of nearly 9 million people – think record-low interest rates will have a negative effect on their investment strategy this year, while 3.19 million investors are now re-evaluating their financial plans in light of this issue.
Despite the concerns surrounding new political leaders and the interest rates slump, investors have signalled their resounding confidence in the UK’s entrepreneurial talent. IW Capital’s research revealed that 27% of investors – 6.62 million people – believe entrepreneurs and private sector businesses will play a critical role in driving private sector growth in 2017, painting an optimistic picture for SME investment in high-growth sectors over the coming year.
Luke Davis, CEO of IW Capital, commented:
“In 2016, the UK experienced a number of historic political events, the true impact of which is now beginning to emerge more clearly in the investment arena. In a year of firsts, where sizeable political shifts made a notable impression across many financial markets, investor sentiment within the private sector has remained resilient.
“It’s interesting to note investors’ plans in light of the slump in interest rates and leadership discontent; transition brings opportunity, and this is reflected in today’s research. With investors looking to new investment classes as we enter into 2017, there is clearly a huge amount of confidence towards the country’s entrepreneurial capabilities, its resolute private companies and the potential of our innovative high-growth businesses to drive economic growth in 2017.”