UK retail investors have rushed to withdraw money from investment funds this year, with net outflows in the first three months hitting ￡7.1bn, the highest level since the fourth quarter of 2018.

The pace of the withdrawal accelerated rapidly over the three-month period, as concerns about inflation and rising interest rates were compounded by the impact of the Ukraine war, according to data released on Thursday by the Investment Association, the fund industry group.

While the data cover a period that ended over a month ago, analysts expect investors to remain nervous. Inflationary fears have only grown in the light of the conflict, prompting both the US Federal Reserve and the Bank of England to raise official interest rates this week. Meanwhile, the fighting in Ukraine shows no sign of abating, causing human and economic havoc and disrupting global trade, especially in grain.