Nearly half of investors believe Brexit will actually have a positive impact on their investment strategies in 2017, according to a new survey, but are fearful of both the UK’s and US’s new political leaders.
Research conducted by IW Capital found that recent world events, including the UK’s decision to leave the European Union and the ascendance of Donald Trump to US president, have meant that 2.21 million UK investors are entering 2017 with a greater risk appetite and are currently seeking new investment classes.
2017 represents a ‘triple-threat’ for investors, with record low interest rates and uncertainty over the outcome of Brexit and Donald Trump’s economic policy weighing on investments.
36 percent of the 1,000 British investors surveyed though record-low interest rates will negatively impact their 2017 investment strategy, with 26 percent saying this issue is the single biggest risk to their investments. Interest rates were cut by the Bank of England in August 2016, down to 0.25 percent – the lowest they have ever been – and on 2 February 2017 it announced that it would be holding the rates at this record-low, despite further upward revisions for the UK’s 2017 economic growth forecasts.
Somewhat unexpectedly, 44 percent of investors believe that Brexit will have a positive impact on their investment strategy in 2017. However there is not the same optimism for Donald Trump; 44 percent of investors are worried about the impact of Donald Trump’s Presidency on their investments
Looking towards the UK, just 27 percent said they had faith in Theresa May’s capability to promote investment value as part of a post-Brexit government.
Luke Davis, CEO of IW Capital, commented: “In 2016, the UK experienced a number of historic political events, the true impact of which is now beginning to emerge more clearly in the investment arena. In a year of firsts, where sizeable political shifts made a notable impression across many financial markets, investor sentiment within the private sector has remained resilient.
“It’s interesting to note investors’ plans in light of the slump in interest rates and leadership discontent; transition brings opportunity, and this is reflected in today’s research. With investors looking to new investment classes as we enter into 2017, there is clearly a huge amount of confidence towards the country’s entrepreneurial capabilities, its resolute private companies and the potential of our innovative high-growth businesses to drive economic growth in 2017.”