An estimated £841m was pulled from UK equities by retail investors during August, new figures released by the Investment Association (IA) have shown.

This was part of £2bn worth of outflows from global equities by UK retail investors during August, a continuation from the £1.8bn in July’s outflows.

According to the IA, negative investor sentiment towards equities is being driven by a combination of inflationary pressures and weakening expectations of interest rate cuts, which is impacting risk appetites and investment strategies.

The association suggested that UK investors in equities had been increasingly cautious amid continued uncertainty surrounding the longer-term impact of global trade tariffs, while concerns over elevated equity valuations may also have contributed to the retreat.

Director, market insight and fund sectors at the IA, Miranda Seath, commented that equities leading outflows had reflected “rising caution” and a “reassessment of regional risks” against US dollar diversification.

“The introduction of new tariff policies on 1 August heightened global trade uncertainty, while speculation around fiscal policy and perceptions that equity valuations may be peaking in certain markets further impacted investor activity,” Seath added.

“Looking ahead, sentiment is expected to remain cautious as markets balance stretched equity valuations, higher long-term bond yields and persistent political and fiscal uncertainties.”

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