Britain’s stock market has emerged as the top choice for investors in European indexes, according to a Wall Street bank, reflecting a shift in the UK’s economic outlook.
Bank of America reported a significant increase in investors planning to take substantial positions in UK stocks over the next year. Their poll revealed that the share of “overweight” positions surged to over 30% from less than 10% in July.
In contrast, Germany was the least favored, with more than 30% of respondents indicating they would be “underweight” in the country over the next year, meaning they plan to reduce their investments there.
This shift in sentiment towards Britain coincides with the FTSE 100’s resilience during recent market turmoil, supported by strong performance in the energy and mining sectors. Additionally, Britain’s economy is expected to experience relative stability following Labour’s election victory.
This marks a dramatic turnaround from 18 months ago when Bank of America labelled UK stocks as the most disliked globally, amid high inflation, an energy crisis, and a sharp sell-off in British assets triggered by former Prime Minister Liz Truss’s unfunded tax cuts.
Meanwhile, separate data today indicated that investor confidence in Germany almost halved over the last month due to global market turbulence and an uncertain economic outlook.
