Confidence among institutional investors has suffered its largest one-month drop since the collapse of Lehman Brothers, with uncertainty over of the UK General Election, the "flash crash" in the US, and high levels of market volatility combining to make investors more risk averse.

State Street's Investor Confidence Index fell 11.2 points to 88.2 in the month to May 24, the largest month-on-month decline since the index fell 16 points to 82.1 between September and October 2008 - during which time the collapse of Lehman Brothers sent shock waves through the global markets.