Investors head back to UK waters for safer returns

In its latest adviser analysis, Skandia found confidence levels over the economy have risen from 5.2 to 6.4 since the end of the third quarter 2012.

James Millard, director of investments, said that as well as seeing a rise in confidence, economic concerns have shifted. Advisers are now more concerned about the effect of rising interest rates than the knock-on effect from Europe.

In Q3 last year just 2.6 per cent of advisers highlighted interest rate rises as a significant concern, compared with 21.5 per cent this year.

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Most popular investment class

* UK equities: 24.3 per cent.

* US equities: 20.4 per cent.

Least popular investment class:

* Cash: 38.2 per cent think this will be the worst performer.

* UK Gilts: 30.8 per cent think that these will perform just as badly.

Adviser View

Adrian Lowcock, senior investment manager for Bristol-based Hargreaves Lansdown, said: “The IMF forecasts, and economic forecasts of growth generally, have a lot to do with consumer confidence. They can also affect stock markets, particularly changes in GDP figures.

“The change in view highlights what has always been a trait with the UK. We continuously underestimate the economic strength. As confidence grows in the UK recovery, this will feed through to consumer and investor confidence.”