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Confidence in UK market slumps

Confidence in UK market slumps

Confidence in the UK’s economic prospects is falling to levels last seen in 2013, according to the latest Cisi survey.

The Chartered Institute for Securities & Investment (Cisi) found a decline in the number of people who felt optimistic about the economy.

Of 983 respondents to an online survey, the sum of those who were more optimistic about the outlook for the UK than eight months ago, minus those who felt less optimistic, was 6 per cent.

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When Cisi last ran the survey in spring 2015 the comparative figure was 31 per cent.

Concerns raised in Cisi’s latest survey included debt, terrorism, austerity, Brexit and interest rate rises, with one contributor simply stating: “We are due a recession; it is time.”

Other comments included:

• “Wages are low, taxes are high and there is more debt. And now there is talk of a rise in interest rates. We are very likely to go back into recession.”

• “World economic events, especially in China, as well as political uncertainty regarding the US, a possible Brexit and the Middle East are likely to impact on business confidence.”

• “Cameron seems to be losing the EU argument, which will be bad for the City.”

• “The level of debt in combination with the rise in interest rates could be lethal in the long run, unless the UK never intended to pay it off in the first place. History has shown us that any time a country has been in such a high level of debt in comparison with its GDP, it has defaulted.”

• “Both the private equity and property markets look frothy. It is reminding me of 2005-2007.”

• “Current terrorism activity is affecting market sentiment, so I feel it will remain stable artificially for a time as markets play a ‘wait and see’ game.”

Simon Culhane, Cisi chief executive, said: “Our latest survey demonstrates the importance of the link between world events and public confidence in the UK economy, with a Brexit proving to be a serious concern for the financial services industry.”

Tony Catt, compliance officer at Peacehaven-based Anthony Catt Limited, said: “There are still more people who are positive than negative in the survey.

“There are significant worries concerning China, the position with Europe and the ongoing situation with Islamic State.”

“The market does not tend to like uncertainty and all of these issues could have consequences that could affect our financial system.”

katherine.denham@ft.com