Yahoo Finance UK investors cautious as two-thirds predict harder COVID-19 fallout in 2021
UK investors are extremely cautious going into the new year, as two thirds predict a harder COVID-19 fallout in 2021, research suggests.
About 65% of UK investors believe the true impact of the pandemic on the UK economy has not yet been seen, and that it will be even harder felt in 2021, according to a survey of 885 by HYCM.
Chancellor Rishi Sunak had warned in his spending review that the UK economy is likely to contract by 11.3% in 2020 – the biggest recession in 300 years.
The survey found that three in five investors plan to adopt a more conservative investment strategy by focusing on security rather than returns in the coming 12 months.
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Meanwhile, 62% will wait until a vaccine is rolled out before making any major decisions.
Once a vaccine is available, 43% plan to invest into sectors worst-affected by the pandemic, such as travel and hospitality, in the hope they will recover.
The research also found a third (34%) of investors will be looking to renewable energy stocks and shares in 2021. This figure rises to 46% among those aged 18 to 34.
Three in five (58%) respondents support yet another delay to the Brexit deadline of 31 December 2020 due to the disruption of the pandemic.
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“With 2021 fast approaching, it is clear investors are preparing for another year of market volatility as a result of COVID-19,” said Giles Coghlan, chief currency analyst at HYCM.
“What’s more, investors are quite reasonably fearing the worst is yet to come with regards to the pandemic’s economic damage.
“The arrival of vaccines will be an interesting development – one this happens, I’d anticipate a flurry of activity on the financial markets, as investors take advantage of sectors posed for recovery.”
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