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Brexit and UK growth top concerns for CFOs

Monday 17th July, 2017

According to Deloitte’s CFO Survey optimism among UK businesses has fallen and concerns about the impact of Brexit have risen.

The survey found 42% of CFOs say they are less optimistic about the prospects for their company then they were three months ago, up from 17% last quarter. 18% of CFOs say they are more optimistic, down from 31% in Q1.

43% of CFOs say that the level of uncertainty facing their business is high or very high, up from 34% last quarter and 22% say now is a good time to take risk onto their balance sheets (down from 26% in Q1).

The survey also found 36% of CFOs say that increasing cash flow is a strong priority for the coming 12 months, up from 34% in Q1, while 46% say they will focus on cost control, up from 42%.

Looking across the corporate sector as a whole, 43% of CFOs say they expect hiring to decrease in the next 12 months, up from 28% in Q1 while 32% expect a slowdown in capital spending, up from 22% and 55% expect discretionary spending to slow, up from 38%.

72% of CFOs say the business environment will be worse when the UK leaves the EU, up from 60% in the previous quarter and the highest level since the referendum. Just 8% say the business environment will be better as a result of Brexit, the lowest level recorded.

Ian Stewart, chief economist at Deloitte, said: “This latest dip likely reflects the surprise outcome of the election, so a drop in confidence is understandable. CFOs are also more focused on the prospect of slower UK growth. What is striking from this survey is that concerns around geopolitics and weak global growth, which dominated CFOs’ concerns in 2015 and 2016, have eased significantly."

"This survey ran at a point of high political uncertainty and it is worth noting that sentiment and risk appetite are still well above the levels seen last summer. Favourable financial conditions and an improving global backdrop are also helping to support business at a time of rising domestic uncertainties."

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