Hargreaves Lansdown’s monthly Investor Confidence Index has risen for the third consecutive month to reach a nine year high.

The index is calculated by looking at investors’ outlook for the UK stock market over the short, medium and long term.

Hargreaves Lansdown report says that 80% of investors who participated in its survey believe it likely or very likely the UK stock market will be higher one year from now.

Nearly, 31% of the respondents said interest rates will be higher in a year’s time, notwithstanding ‘forward guidance’ to the contrary from Bank of England Governor Mark Carney.

The US remains the overseas market about which investors are most confident, despite continued wrangling over government budgets and the debt ceiling. Europe, Japan and emerging markets remain out of favour, according to the report.

Adrian Lowcock of Hargreaves Lansdown said that the UK has benefited the most, with investor confidence growing as the economic outlook has been improving.

"In August the Bank of England upgraded the UK’s growth forecasts, with the IMF [International Monetary Fund] following suit in October."

"The decision by the US not to taper quantitative easing in August resulted in the sell-off of emerging markets being reversed and investors are now beginning to look at the region again, although confidence is growing from a low level," Lowcock added.

The index also found that investor confidence in Asia and emerging markets is improving. About 56% of investors viewed global emerging markets as positive, while only 60% viewed for Asia, and only 45% viewed Japan as positive.

"Japanese and European markets have long been unpopular with investors but, according to our analysis, are also amongst the cheapest markets," Lowcock concluded.