Confidence among investors fell across all regions in August with the UK and Europe worst hit, according to the Hargreaves Lansdown Investor Confidence Index.

Confidence in UK economic growth fell by more than 16%, reflecting ongoing concerns over the country’s economic trajectory.

Weak GDP growth, mixed messaging on fiscal plans, and wavering political clarity post-election have all added to investor caution, HL said. Confidence in the UK stock market also slipped at a similar level.

In Europe, investor confidence also fell by just over 16% as signs of economic stagnation and uncertainty over the European Central Bank’s next move on interest rates weighed on sentiment. Japan saw confidence fall by 11%.

The optimism driven by corporate reforms earlier in the year has cooled, HL said, as slower-than-expected wage growth and global demand concerns start to bite.

Outside of those regions, sentiment proved more resilient, but still fell. The US saw a more modest decline, against a backdrop of some recent strong earnings from major tech names, as did confidence in the Asia Pacific and emerging markets.

Despite the downturn in confidence, in some cases stock market performance continues to diverge from economic sentiment, with the Japanese and European markets growing so far in August. So have UK mid-sized companies, though larger UK firms have struggled.

Kate Marshall, lead investment analyst, Hargreaves Lansdown, said: “After some improvement in July, investor confidence took a hit across global markets in the first week of August, with the sharpest declines seen in sentiment towards the UK, Europe, and Japan.”

Looking at funds, after three months in the top spot, actively-managed Artemis Income holds its place through the early part of August. Passives remain the most popular choice with investors overall though, with the remaining nine funds being index trackers.

Source: Hargreaves Lansdown

The most popular investment trusts were a real mixed bag, with more conventional trusts focused on areas such as global and European equities, as well as UK equity income, featuring in the top ten.

Trusts focused on infrastructure also remain popular, including Greencoat UK Wind and NextEnergy Solar Fund.

Source: Hargreaves Lansdown

Ms Marshall said: “Many of these trusts pay an attractive income and continue to trade on large discounts, which have made them appealing to investors.”

• The Investor Confidence Index is compiled by surveying HL clients on a monthly basis. This month’s survey was open 1-8 August.