Investment sentiment in UK shares and government bonds saw the biggest year-on-year changes in August, increasing 11 and 14 percentage points respectively, according to the Lloyds Bank Private Banking Investor Sentiment Index.

Investment sentiment in UK shares and government bonds saw the biggest year-on-year changes in August, increasing 11 and 14 percentage points respectively, according to the Lloyds Bank Private Banking Investor Sentiment Index.

Despite remaining the overall highest-scoring asset class at 41 per cent, sentiment for UK property dropped for the third consecutive month in August, down five percentage points from last month.

The monthly survey found that sentiment among investors in the eurozone dipped three percentage points in confidence, falling back to -21 per cent, despite being the highest performing asset class in July. This swing means that eurozone shares continue to be the only asset class viewed negatively on a net sentiment basis by surveyed investors.

Gold was the most positive asset class performer with a two percentage point increase at 24 per cent in August, while UK government bonds saw the biggest year-on-year increase, up 14 percentage points, suggesting both these asset classes could be perceived as “safe havens”.

Sentiment towards emerging markets saw the largest drop in the month, falling -7 percentage points to an overall net sentiment of 11 per cent.

Ashish Misra, head of investment policy at Lloyds Bank Private Banking, said that the large increases seen in UK asset classes over the past 12 months were a positive sign that there is a significant increase in sentiment towards a recovering UK economy.

“While we have continued to see a month-on-month decrease in UK property, this could be a reflection on the market as this drop reflects a stabilising market across the UK. The consecutive increase in gold alongside the strength in government bonds could be viewed as ‘safe haven’ investments given the mix in market conditions across Europe,” said Misra.

"Overall, and the third straight month of decline in overall sentiment notwithstanding, the net score remains firmly positive and current short-term trends indicate a moderation, rather than any strong reversal, in investor sentiment,” added Misra.