UK retail investors pulled £752m from funds during July, reversing the inflows of £208m in June, new figures published by the Investment Association (IA) have revealed.

The shift was driven by £1.8bn of equity outflows across global, UK and North America funds.

UK equities remained in outflow territory in July, with £718m of redemptions. The IA said the continued selling suggests investors are taking a “more cautious stance” toward UK equities, potentially in anticipation of the upcoming Budget – which was confirmed yesterday for Wednesday 26 November – and its implications for taxation, spending, and broader economic growth.

The IA also suggested that ongoing global trade tensions and the longer-term economic implications of higher tariffs may be prompting investors to take risk off the table.

Director, market insight and fund sectors at the IA, Miranda Seath, suggested the return to outflows at the start of July highlights the “continued pressures faced by investors” trying to balance the risks and opportunities of market volatility, geopolitical tension and uncertain trade relationships.

“These factors have driven investors to depart from equities in July, but we have yet to see if this will be a sustained trend or a temporary adjustment as investors continue to ponder their portfolio positioning, remaining firmly in ‘wait and see’ mode,” added Seath.

“In the very near term in the UK, investors have seen a recent rate cut, pushing down rates on cash savings and rising inflation. This could push more money into investment funds. The steep rise in the value of physical gold suggests that institutional investors perceive that risk is rising- investors buy gold to hedge risk.

“If we follow this logic through to funds, it suggests that investors could de-risk as we head towards a late November Budget.”

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