A recent poll of economists and bond strategists has uncovered that investor confidence in British-based assets is placed on the brink of a precipice.
The research found that just over half (55 per cent) of the international research consultancies and banks polled stated there was a high risk that confidence in UK assets would sharply deteriorate in the last quarter of 2022. Additionally, 15 of 29 respondents, which included three key dealers of British government bonds, commented that the risk was high.
Although currencies across the world have plummeted against a surging dollar, inflation has hit government bond prices heavily everywhere. Figures show that the UK has suffered far worse than many other nations. The pound recently lost 7.0 per cent of its value to the dollar, making it one of the worst performing currencies. UK consumers interested in investing in government bonds and other assets often seek out financial advice in Chester, Manchester and other cities.
Ten-year type government bond prices have also fallen far further in the UK over the same time than in Germany, Italy, France and the United States, a fact that cannot be explained simply by currency movements.
These shifts partly reflect investors’ concerns that Britain’s dependence on imported energy will render it exposed to higher rates of inflation for a longer period. However, investors also have doubts regarding the economic agenda of new Britain’s PM Liz Truss, who recently announced expensive plans involving subsidising energy bills alongside tax cuts.
