eToro: Recession becomes top concern for UK retail investors

investmentweek.co.uk:

'There is concern that the tightening we have seen so far could tip the UK into a recession.'

In the June 2023 iteration of the survey, respondents claimed inflation was their biggest cause for concern, with 22% stating it was their top worry.

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But in September's RIB, 22% of the 1,000 retail investors polled cited a potential recession over the next 12 months as their top concern, overtaking inflation (20%).

This was also mirrored in a reduction in the proportion of retail investors who felt confident about the UK economy at 33% — down 4 percentage points in the last six months, eToro found.

Despite the concerns, retail investors shared a more upbeat outlook about markets, with 76% confident about the prospect of their investments, up from 69% in Q2 2023.

eToro said the positive outlook could lead to investors increasing their contributions, with 28% stating they plan to do so over the next quarter. Around 65% said they will keep their contributions level, while 7% intended to reduce them.

Of those looking to increase contributions, technology and finance were the preferred sectors, at 13% each, while online retail, cars and industrial stocks were the least favoured, all at 2%.

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eToro global markets strategist Ben Laidler said: «There is a growing sense that the Bank of England's tightening is having the desired effect in taming price increases, meaning that inflation is no longer the worry it was for investors just a few months ago. At the same time, there is concern that the tightening we have seen so far could tip the UK into a recession. While that is far from a foregone conclusion, given how resilient the