Chronological coverage updated 1st October 2026 10:47.
Update 1 · 1st October 2026
Investor Confidence Weakens Over UK Fiscal Policy and Resurgent Inflation Risks
International investor appetite for United Kingdom assets is coming under strain due to persistent anxieties over government fiscal strategy and renewed inflation threats, according to a major survey of financial market sentiment.
The latest Investor Barometer survey by investment bank Berenberg highlighted ongoing caution regarding long-term spending plans, borrowing levels, and tax policy.
40 per cent of surveyed international money managers identified policy decisions as the single biggest threat to the UK economy..
Cityam reportedly quoted Andrew Wishart (Berenberg chief UK economist) as saying: “Burnham and the Chancellor have since conceded that higher spending is the wrong choice when borrowing and the tax burden are already problematically high, which gives us some reassurance that they will avoid a major policy error.”.
Inflation Escalation and Subdued IPO Outlook
The survey noted a doubling in the number of asset managers expressing concern over consumer price inflation. Economists warn that rising energy prices linked to conflict in the Middle East could drive UK inflation past 4 per cent early next year, well above the Bank of England's 2 per cent target.
Hopes for a quick resurgence in London initial public offerings have also faded. Only 32 per cent of fund managers expect UK stock market listings to pick up over the next 12 months, down from 63 per cent six months ago, despite high-profile proposals such as Airtel Money's planned £5.3 billion debut.
- Four in ten institutional investors view UK government policy decisions as the primary risk to economic growth.
- Rising Middle East energy costs are projected to push inflation above 4 per cent early next year.
- Only 32 per cent of asset managers anticipate a revival in London stock exchange IPO activity this year.