Lloyds Investor Sentiment Index measured at 5.69% in March this year, up by more than 3% on the same time in 2016.
Investors were most confident on the prospects for the UK Property sector with sentiment measuring 6.9% in March.
This was “indicative of the growing belief in national economic resilience, come what may,” according to Lloyds Private Bank CIO Markus Stadlmann.
Sentiment for UK Equities showed the largest upswing out of all asset classes since March 2016, up 26% year-on-year because investors were, according to Stadlmann, “largely undeterred by geopolitical uncertainty”.
He said: “The announcement of a £60bn UK Brexit fund to steady the economy during Brexit negotiations seems to be having the desired effect of reassuring investors, at least in the short term.”
However, the outlook from both Allianz Global Investors and Deutsche Bank warns markets are ill-prepared for what’s to come.
Oliver Harvey, macro-strategist at Deutsche Bank, said markets had not priced in the full impact of a hard-Brexit.
He said: “If Brexit is fully priced, the market has a benign view of the outcome. Consensus estimates for 2017 GDP have risen to 1.6%, from a nadir of 0.5% shortly after the referendum. This is only a 0.2% slowing from last year.
“But recent weakness in retail sales shows household spending is responding to slowing employment and rising shop prices.
“Much has been made of robust UK PMIs, but this is due to stronger global growth. Indeed, the UK’s manufacturing PMI is turning lower even as global PMIs make new highs.”
