Iraq jitters 'still hitting investment'

War jitters are still hitting investment

The end of hostilities in Iraq has left the British public still reluctant to put their money in the stock market, according to a key trade group.

Research by the Association of Investment Trust Companies (AITC) warns that 27% of investors are less confident about investing in equities than before the conflict began.

Although the fighting has died down, old worries about the fragile health of the economy are reasserting themselves, together with the fear of the effects of global terrorism which soared following 11 September 2001.

Even so, 15% of those surveyed said they are more confident, the AITC survey indicated.

Bounce

The declaration of victory by the US-led forces in Iraq has led to something of a stock market bounce.

The UK's blue-chip FTSE 100 index climbed above 4,000 earlier this week for the first time in four months, although it has since dipped back below the line.

But the boost has largely been the product of share buying by institutional investors, dealers say.

Individual investors remain very nervous, the AITC said.

Another survey, by the Investment Management Association and quoted in the Financial Times, said that the flow of funds into individual savings accounts in the year to April 2003 was the worst on record.