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Investor and business confidence crash in UK amid Brexit worries

Staff Writer |
Business and investor confidence have both taken a turn for the worse, amid growing concern about squeezed consumer purses and as domestic politics undermines Brexit talks that continued on Monday.

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An investor confidence survey from broker Hargreaves Lansdown showed a sharp fall in July, with the index measure dropping 20% to 69 points from 86 points a month before.

The long term average level for the index is 99, and the lowest level since the index was launched in 1995 is 59, which was recorded in November 2016 and has coincided with a spike in expectations of an interest rate hike.

Some 44% of investors now think that there will be an interest rate rise in the next six months, up from 16% in June, with more than 80% of investors predicting an interest rate rise within 12 months, up from 54% in June.

Meanwhile, business sentiment has dropped to its lowest point for almost six years, a separate report from IHS Markit has found.

IHS Markit said the net balance of UK companies expecting a rise in business activity over the next 12 months had fallen to +35% in June down from +52% in February to the worst level since October 2011.

Although manufacturers remain sanguine, the headline reading was driven by the lowest degree of confidence in the services sector since June 2010.

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