Overview

• Bank of America’s global fund manager survey shows UK equity allocations slid from a net 2% underweight in August to 20% underweight in September, the steepest monthly rotation since 2004.
• Exposure to British shares is at an 18‑month low, and Bank of America now frames UK equities as a contrarian trade.
• The survey links the retreat to sluggish domestic data, including stagnant GDP and falling payrolled employment, and to expectations of sizeable tax rises in the autumn budget under Chancellor Rachel Reeves.
• The UK stands out as managers raised global equity exposure to a net 28% overweight even though a net 16% still expect the world economy to weaken.
• Analysts also flagged elevated inflation, higher long‑dated gilt yields, and a softer pound as pressure points for the UK, while opposition figures criticized Labour’s approach as harmful to investment.