Investor sentiment falls on government recovery plans

Debt to GDP ratio doubled since 1970s

clock • 1 min read
Investors are losing faith in the UK Government's ability to handle the economy post-pandemic
Image:

Investors are losing faith in the UK Government's ability to handle the economy post-pandemic

UK-based investors are losing faith in the government’s ability to rebuild the economy following the pandemic, HYCM research has found.

The survey of nearly 1,500 investors with investments of more than £20,000 excluding property, savings and workplace pensions, found that 60% do not believe Prime Minister Boris Johnson and the Conservative government have handled the pandemic properly.

An additional 59% said they lack faith in the government's ability to tackle the record levels of public debt that was accrued during the coronavirus pandemic, while half of UK investors said they are concerned about the potential of acute economic austerity over the coming years.

"As recent policy reforms would suggest, the government is already taking significant action to repay the large level of public debt accumulated during the pandemic. Consequently, the UK is now approaching an interesting juncture when it comes to its post-pandemic recovery - and clearly, some investors are worried," said Giles Coghlan, chief currency analyst at HYCM.

"Given the fact that recent changes have little precedent outside of a Budget, our research shows that a large number of investors are faltering when it comes to their trust in Boris Johnson's Government. The UK's debt to GDP ratio has almost doubled since the 1970s and is well above the European average. Investors will be mindful that the UK now owes more money than it prints."

He added that despite the uncertainty, some analysts are predicting that the FTSE 100 could potentially offer better value for medium-term investors when compared with US stocks.

"With numerous changes already in the offing, from taxation reforms to national insurance policy overhauls, traders and investors will no doubt be adjusting their strategies accordingly. Investors should monitor any developments closely before making any hasty changes to their portfolio."

More on Investment

Watch Professional Adviser's Working Lunch with Schroders - Beyond the Pulse: Essential insights for financial advisers in 2025

Catch up on the discussion

Professional Adviser
clock 10 July 2025 • 1 min read
Investors 'do not understand' implications of private markets investing

Investors 'do not understand' implications of private markets investing

House of Lords Financial Services Regulation Committee looked at the issues

Linus Uhlig
clock 09 July 2025 • 1 min read
NextWealth MD Hopkins on staying ahead of advice sector changes, data challenges and flattening MPS fees

NextWealth MD Hopkins on staying ahead of advice sector changes, data challenges and flattening MPS fees

Making technology work better

Katrina Lloyd
clock 03 July 2025 • 9 min read

In-depth

Why Gen Z still trusts financial advisers in the age of finfluencers

Why Gen Z still trusts financial advisers in the age of finfluencers

A digital generation with a human touch

Sahar Nazir
clock 23 June 2025 • 4 min read
QROPS class actions: What next for frustrated UK expats?

QROPS class actions: What next for frustrated UK expats?

Calls for reform across the board as insurers fight back in IoM

Isabel Baxter
clock 29 May 2025 • 7 min read
AI on trial: FCA's Live Testing opens new path for advisers

AI on trial: FCA's Live Testing opens new path for advisers

Offering regulated firms a controlled space to trial advanced technologies

Sahar Nazir
clock 21 May 2025 • 7 min read