Why UK AIM stocks are taking a battering
There is no doubt that AIM Stocks have suffered recently. In early summer, the expectation was that inflation had been tamed and the interest rate cycle had turned. This led to some optimism returning to the market, which had been beaten down for so long. Here is what the AIM100 index looks like over three years:
However, that optimism has proven short-lived. The surprise election in July led to an increased focus on what an incoming government would look like and what impact this would have on investors:
The effect on the smallest UK stocks from this uncertainty has been two-pronged. Firstly, it appears to have caused a dip in consumer sentiment. The GfK Consumer Confidence index dropped to -20 in September from -13 the previous month. Expectations for personal finances over the next 12 months, the 12-month outlook for the economy and the major purchase index all fell significantly. The blame has been put on worries about what will be in the Autumn Budget that will be announced on 30th October. The message from the new government has been that public finances...