News By Wire

Majority of UK investors fear “inflation is ingrained in the economy”

A survey of 914 retail investors in the UK has found:

– 56% believe inflation is ingrained in the economy and will be hard to reverse
– 43% believe the Bank of England should stop hiking interest rate hikes to avoid a banking crisis
– Just 31% think the Government will deliver on its promise to half inflation this year

UK retail investors believe that inflation is deeply entrenched in the economy, posing the most risk to their portfolio, new research commissioned by HYCM has revealed.

The trading broker commissioned an independent survey of 914 UK-based investors, all of whom have investments in excess of £10,000, excluding the value of their savings and residential property.

It found that the majority (56%) believe that persistent inflation is now ingrained in the economy and will be difficult to reverse.

When quizzed about the factors presenting the most risk to their investment portfolio, inflation (50%) was the most common selected a further, followed by market shocks and volatility (45%), slow economy growth (44%) and the possibility of a banking crisis (39%).

More than two in five (43%) retail investors believe that the Bank of England should stop hiking interest rates to avoid a banking crisis. Over a third (35%) sayinterest rates have risen too high and are negatively impacting their investments.

Less than one third (31%) were confident that the UK Government will be able to deliver on its pledge to half inflation this year.

Giles Coghlan, Chief Market Analyst, consulting for HYCM, said: “While the effort to contain US inflation now seems to be bearing some fruit, UK inflation is proving to be stickier than expected. Following the Bank of England’s 12thconsecutive interest rate hike, persistent inflationary pressures, including wage growth and a tight labour market, mean that interest rates could rise even higher still this year.

“With core inflation ticking up and the headline print remaining stagnant, our research shows that investors are rightfully concerned about the impact of inflation on their assets and the wider economy. However, the Bank of England is no longer forecasting a recession for the UK and has revised GDP up for next year to 0.75% from a prior projected fall of -0.25%, which should provide investors with some confidence about the road ahead. That said, with millions of homeowners still to feel the full impact of rising interest rates, stronger growth may still prove illusive for the UK economy, especially if rates have to move to 5% and beyond to tackle strong UK inflationary pressures.”

About HYCM       
HYCM is an online provider of forex and Contracts for Difference (CFDs) trading services for both retail and institutional investors. HYCM is regulated by the internationally recognized financial regulator FCA. HYCM is backed by the HYCM Capital Markets Group established in 1977 with investments in property, financial services, charity, and education. The Group via its relevant subsidiaries have representations in Hong Kong, United Kingdom, Dubai, and Cyprus.       
       
High Risk Investment Warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 71% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. For more information, please refer to HYCM’s Risk Disclosure.       
  
*Any opinions made in this material are personal to the person expressing the opinion and do not reflect the opinion of HYCM. This material is considered a marketing communication and should not be construed as containing, investment advice or an investment recommendation or, an offer of or solicitation for any transactions in financial instruments. Past performance is not a guarantee of or prediction of future performance. HYCM does not take into account your personal investment objectives or financial situation. HYCM makes no representation and assumes no liability as to the accuracy or completeness of the information provided, nor any loss arising from any investment based on a recommendation, forecast or other information supplied by an employee of HYCM, a third party or otherwise.

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Sian Bradshaw

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City Road Communications

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