Investors are entering election week with low confidence in the UK economy, according to data from investing platform eToro.
A survey of 1,000 retail investors found just 34 per cent were confident in the UK economy, down from 37 per cent the previous quarter.
Despite this, 80 per cent were confident in their own investments, while 70 per cent were confident in their income and living standards.
Dan Moczulski, eToro’s UK managing director, said: “Despite concerns over the economy, there is little sign of UK retail investors retreating from markets.”
The data showed 95 per cent had maintained or increased their investment contributions over the past three months, and 94 per cent expect to do the same over the next quarter.
However, investors are still cautious with 20 per cent saying the UK economy or potential recession was the biggest external risk to their portfolios.
Moczulski added: “UK investors are becoming more selective and more discerning.
“They’re able to separate confidence in individual UK success stories such as Rolls Royce from a more cautious view of the broader economic outlook. That’s shaping a more open attitude to diversification.
“While they still back strong companies at home, there’s a growing sense that some of the bigger opportunities may lie beyond the UK, whether that’s commodities like gold and oil or overseas markets.”
He said higher cash levels in the UK reflect this mindset, with 82 per cent of UK retail investors holding savings accounts or cash Isas.
Lale Akoner, global market strategist at eToro, said UK investors are “cautious, but disciplined” and investors want more protection against uncertainty.
He said: “Whoever gains momentum after Thursday’s elections will be facing an investor base that is engaged, but not fully convinced.
“The priority for investors is policy stability, credible growth and a clearer economic direction. Without that, they may continue to look beyond the UK for opportunities.”
tara.o’connor@ft.com
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