Brexit: Sentiment towards UK worsens

A number of institutional investors have indicated they will reduce their UK exposure in the next six months.

The move is considered to be connected to Brexit and reflects a trend in falling sentiment towards the UK.

The finding stems from 102 institutional investors globally who were polled by State Street for its quarterly Brexometer Index.

Despite increasing optimism towards the global economy, the survey suggested that 24% of the investors intended to reduce their holdings of UK assets in the next six months. This marked a 6% increase from the final quarter of 2017, and greater than the average throughout 2017.

The majority (87%) of institutional investors said the economic impact of Brexit would probably have an impact on their business operating model. This represented a 16% increase from Q3 last year.

“Investors are more concerned about holding UK assets at a time when they are becoming increasingly optimistic about the global economy,” said Michael Metcalfe, head of global macro strategy at State Street Global Markets. “While a rising tide is supposed to lift all boats, the weight of Brexit uncertainty is now suppressing, although not yet submerging, attitudes toward UK assets.”

©2018 funds europe

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