The UK’s equity markets have taken a hit as the Labour government’s pessimistic portrayal of the country’s economic outlook reverses a brief recovery in investor interest.
New figures from Calastone, a global fund network, show that UK-focused funds suffered net withdrawals of £666 million in September, while other geographically focused fund sectors recorded inflows.
Overall, global investors pulled a net £564 million from fund holdings, marking the end of a ten-month streak of near-record inflows. Equity income funds, which have significant exposure to UK equities, lost £416 million in capital. According to Calastone, UK-focused equity funds have not seen positive net inflows since 2021.
The decline in investor sentiment comes amid criticism of Labour’s portrayal of the UK economy since taking office in July. Chancellor Rachel Reeves and Prime Minister Sir Keir Starmer have faced backlash from the City for…
