Almost 90 per cent of British investors are looking beyond the UK for their investments, as the impact of Covid-19 and Brexit takes its toll.
According to a new survey by uk.Investing, 75 per cent of investors see more potential in overseas investments over the coming year. 30 per cent have decreased their holdings in UK-based equities over the past year, while 65 per cent said that they have increased their positions in foreign investments or cryptocurrencies following the 2016 Brexit referendum.
Since the start of the pandemic in 2020, 62 per cent of those surveyed said that they have increased their investments in foreign and digital currency.
“It’s unsurprising to see UK investors shunning the domestic market for better returns elsewhere,” said Samuel Indyk, senior analyst at uk.Investing.
“The FTSE has consistently underperformed its counterparts in Europe since the Brexit vote and there’s no reason to suggest that won’t continue as the UK grapples with its new trading arrangements.”
As many as 66 per cent of UK investors own investments in the US, followed by Europe (14 per cent), China (five per cent), Canada (three per cent) and India (two per cent).
When asked why they were investing more money overseas, 67 per cent of the investors surveyed blamed Brexit, while 76 per cent blamed Covid-19.
“A shortage of workers in lower-paid jobs is having an impact on UK supply chains, with petrol stations running out of fuel and some supermarket shelves remain empty,” Indyk continued.
“It’s unfair to blame this entirely on Brexit but the UK appears to be suffering more from these issues than its European neighbours. And, despite Covid cases showing signs of picking up in recent weeks, there’s no reason to think the government will be reverting back to lockdown restrictions to control the spread. Lockdowns were particularly damaging for economic growth and the impact of Brexit could be more damaging in the coming months.”