Corbyn leapfrogs Brexit as biggest concern for investors

·         More than a third of investors’ biggest fear for 2020 is a Labour Government coming to power

·         Worries about Brexit’s impact on markets has fallen

·         Global recession fears are rife

A Labour Government coming to power is the biggest concern for investors in 2020, according to a new survey of more than 1,400 private investors carried out by AJ Bell*. The research found 35% of people thought it was the biggest worry for stock markets next year, compared to just 3% who thought that a Conservative Government remaining in power was the biggest threat to markets, and 8% who were worried about the uncertainty a hung parliament or collation Government would bring.

The threat of Jeremy Corbyn becoming Prime Minister leapfrogged Brexit as the biggest worry for investors when looking ahead to 2020. Last year Brexit came in as the top concern, with a third of respondents saying it was the biggest threat, but that has fallen to third place with 15% of people ranking it as their top worry.

A global recession was the top concern for more than a fifth of people, while financial factors such as interest rate changes and currency movements barely register as a worry for investors.

Laura Suter, personal finance analyst at investment platform AJ Bell, comments:

“Politics ranks higher than usual on the worry list next year, with the current madness that is UK politics clearly causing concern for investors. While the threat of a Jeremy Corbyn-led Government ranks as the highest threat, worries about Brexit, a hung parliament and a Conservative-led parliament are also on the table. It’s unsurprising considering the UK is facing an uncertain time, both in the outcome of the General Election and the subsequent effect on the Brexit process.

“Labour’s manifesto includes a number of pledges that would be game changing for certain markets, including nationalising companies, forcing shares of some companies to be transferred to employees, and a hike to corporation tax. These represent big switches for companies, and markets generally don’t like change.

“What’s interesting is that Brexit worries have fallen down the list of concerns for investors, this could be due to Brexit-fatigue spreading across the nation or just that the outcome of the UK election is a more pressing concern.

“Aside from UK politics, global recession fears are also rife, potentially fuelled by other factors such as trade wars, Brexit, the uncertain political situation and changing Central Bank interest rate policies. Other concerns that investors raised** included worries about the effect Donald Trump will have on markets, either via his potential impeachment or the impact his constant Tweeting will have on the US economy.”

What is your biggest concern for stock markets in 2020?

*Research conducted online with 1,427 AJ Bell Youinvest customers during November 2019. 

** The potential responses to this question had an “Other” option with a free-fill box, and Trump worries were the biggest recurring theme in those responses.