The Hargreaves Lansdown Investor Confidence Index rose 9 points in December to 68, up from last month’s reading of 59, which was the index’s lowest level since inception in 1995. However the index still remains well below its long term average of 100.
Meanwhile expectations of an interest rate rise have crept up – 58 percent of investors now expect a UK interest rate rise within the next 12 months, compared with just 25 percent in August. This is the first time more than half of investors expect an interest rate rise within 12 months since December of last year. So far December has been a good month for UK stocks, with the FTSE 100 rising by over three percent to break through 7,000 (again) today. December is statistically a good month for the UK stock market, the FTSE All Share has made a positive return in the month in 25 of the last 30 years.
Laith Khalaf, Senior Analyst, Hargreaves Lansdown: ‘Festive good cheer has had a very limited impact on investor confidence, which rose slightly in December, but still remains stubbornly low, despite rising markets. Indeed the Footsie is enjoying a Santa rally, nobody really knows why but December is statistically a very good month for the UK stock market. Investors are becoming more expectant of an interest rate rise, with more than half now anticipating an increase in the next 12 months. Financial markets disagree however, they are pricing in only a one in three chance of a rate rise in 2017, and this wouldn’t be the first time that savers’ hopes have been dashed on this score.’
