(Bloomberg) -- Global investors slashed allocations to UK equities in the month after Liz Truss became prime minister, a Bank of America Corp. survey showed. 

Exposure to British stocks “collapsed,” with allocations dropping by nine percentage points compared with the previous month, according to BofA’s global fund manager survey in October. A net 33% of investors are now underweight UK equities, the most in nearly two years.

Unfunded tax cuts announced by Truss’s government late last month triggered a selloff across UK assets. While they have recovered from the worst of the losses after a change of chancellor and emergency debt purchases by the Bank of England, uncertainty lingers around the country’s policies, leadership and the economy. 

On Tuesday, UK bonds extended losses across the curve after the BOE denied a report in the Financial Times that active sales of gilts would be delayed. The FTSE 250 Index of more domestically exposed stocks erased earlier gains. 

BofA’s survey also showed that investors reduced their underweight stance on euro-area stocks over the past month by 10 percentage points, leaving the UK as the market investors are most pessimistic about.

In another indication of bearishness, going short on UK debt and equities was among the most crowded trades in October. 

The survey ran between Oct. 7 and Oct. 13, just a month after Truss’s appointment as prime minister.

©2022 Bloomberg L.P.