It is the steepest drop since May 2012 when the FTSE fell by almost 10% in a matter of weeks.

Private investors are particularly worried about the next 6 months, according to the index, though their longer term outlook for UK shares is still positive.

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Laith Khalaf, senior analyst, Hargreaves Lansdown, said: "The general election has given investors a bad case of the jitters.

"The recent fall in confidence is entirely down to investors' short term market expectations. On a six month view of the stock market, investors' confidence has taken a nosedive. On a one and three year view however, confidence is almost unchanged from last month."

The Hargreaves Lansdown Investor Confidence Index stands at 94, down 11% from last month's reading of 106, and below its long term average of 101.

Despite being spooked by the election, which is three weeks away, Mr Khalaf said investors remained "pretty sanguine" about the longer term prospects for the UK stock market.

He said: "This looks like a sensible view; the election can certainly influence short term market sentiment, but it is unlikely to significantly affect the aggregate earnings of UK companies. So while the election may cause some bumpiness in coming months, in three years' time it won't still be driving stock prices."

He added: "Meanwhile European shares have gone from basket case to investment case in the eyes of private investors. Investor confidence has responded to the "Quantitative Easing programme introduced by the European Central Bank, alongside economic data which show some small signs of improvement in the region."