Only a quarter of UK retail investors have faith in the Conservative party’s economic policy, with the majority concerned about slowing economic growth, new research from HYCM has found.

The findings also indicated that just three in 10 investors (30%) believe Jeremy Hunt is the right person to be Chancellor.

Online forex and CFD broker, HYCM, commissioned an independent survey of 721 UK-based investors, all of whom have investments in excess of £10,000, excluding the value of their savings, pensions and residential property.

The research found that just 27% have confidence in the Tory party’s economic policies, with only 22% believing the measures announced in the recent Autumn Statement will have a positive impact on their investments.

However, 48% of investors think the government is right to raise taxes and cut spending to tackle the budget deficit, while 58% also said rising interest rates and inflation are their biggest concerns.

“After a turbulent six months in UK politics, the financial markets have seen unprecedented levels of volatility,” commented chief market analyst at HYCM, Giles Coghlan. “Three Prime Ministers, four Chancellors, a disastrous mini-Budget, and inflation still surging despite successive interest rate hikes – HYCM research shows UK investors are suffering a crisis of confidence in the Government.

“Interestingly, around four in five investors (79%) are not planning on decreasing their holdings in stocks and shares investments, despite the threat that raging inflation poses to their portfolios. If the UK has a deeper recession than is currently forecast, the wealth effect and the risk of a sharp capitulation in stock positions could inflict a significant amount of damage.

“With this in mind, at what point will those investors move away from stocks? Ironically, it could create the perfect conditions to buy when the panic selling begins.”

HYCM’s survey also revealed that just 26% of UK retail investors are satisfied with their investment returns over the last six months. Despite market volatility, only a fifth (21%) have shifted their investment strategy to more traditionally stable assets, such as gold and bonds.

Looking ahead, 37% of investors suggested they are more likely to diversify their investments in 2023 to ensure they can perform well in a range of potential scenarios.

Coghlan added: “Although things have somewhat calmed since Hunt delivered his Autumn Statement, many investors would still benefit from exploring their options – whether this means looking to safe haven assets or diversifying their investments to boost their returns as the UK weathers a recession.”

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