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Deloitte CFO Survey: CFOs’ Brexit concerns at record high

8 October 2018

  • Worries mount over long-term impact of Brexit, with falls in optimism and risk appetite
  • CFOs increasingly expect business spending and hiring to slow post Brexit
  • Higher interest rates and inflation expected within twelve months

Concerns about the effects of Brexit on the UK business environment have increased, according to Deloitte’s latest CFO Survey.

Over the past quarter, optimism and risk appetite have fallen among CFOs and they look more willing to rein in corporate spending over the coming year.

95 CFOs of FTSE 350 and other large private companies participated in the Q3 2018 CFO Survey. The combined market capitalisation of the 66 UK-listed companies who participated is £383bn, approximately 15% of the UK quoted equity market. The survey ran from 14 to 27 September 2018.

Optimism, revenue expectations and risk appetite fall
Overall, 13% of CFOs say they are more optimistic about the prospects for their company than they were three months ago, down from 24% in Q2.

12% of CFOs say that now is a good time to be taking risk onto their balance sheets, down from 16% in Q2.

31% of CFOs say they expect revenues to rise in the coming 12 months, down from 42% in Q2.

Brexit weighs on business spending plans
79% of CFOs say they expect the long-term business environment to be worse as a result of leaving the EU, up from 75% in Q2. This marks the third consecutive quarter that concerns about the impact of Brexit have increased and this reading is now the highest since the referendum.

CFOs are more negative on the effects of Brexit on their hiring and spending decisions. 50% say hiring will slow over the next three years as a result of Brexit, up from 40% in Q2, and 44% say capital expenditure will slow, up from 34%. While increasing in each of the last three quarters, neither is as high as they were immediately after the referendum.

Concerns about Brexit risks increase
CFOs are more concerned about the risk Brexit poses to their business. Rating risks on a scale from 0 to 100, the effects of Brexit scored at 67 (up from 60 in Q2), followed by weak demand in the UK at 56 (down from 57 in Q2).

These are followed by the risk of greater protectionism in the US (53, up from 51 in Q2) and rising geopolitical risks worldwide (53, new question).

Concerns about weakness in emerging markets and the euro area feature at the bottom of the CFO risk list.

Sharper focus on cost control
CFOs have sharpened their focus on defensive balance sheet strategies with a greater emphasis on cost reduction than at any time in the last nine years. 53% cite cost control as a strong priority, up from 47% in Q2. This is followed by increasing cash flow, a priority for 48% of CFOs, down from 49%.

CFOs expect UK corporates to reduce capital expenditure over the next 12 months. The proportion of CFOs who expect to reduce their own capital expenditure as a consequence of Brexit is at its highest level in more than two years.

CFOs brace for higher interest rates and inflation
56% of CFOs say they expect the Bank of England’s base rate to be at or above 1% within a year’s time, an increase from 38% in Q2. 28% of CFOs expect the rate to be at 1.25% or above within a year. This is up from 2% in Q2’s survey.

65% of CFOs expect inflation to be above 2.5% within a year (up from 39% in Q2). 34% forecast it to be between 1.6% and 2.5% (down from 57%).

Almost half of CFOs face a skills shortage
48% of CFOs say that recruitment difficulties or skills shortages experienced by their business over the past quarter have increased, up from 44% in Q2. 50% say there has been no change (down from 55%) and just 1% saying that filling roles has become easier.

Ian Stewart, chief economist at Deloitte, said:
“With the UK’s planned departure from the EU less than six months away Brexit worries dominate our latest survey of UK Chief Financial Officers.

“CFOs have become more pessimistic about the long-term effect of the UK’s departure from the EU. 79% expect Brexit to lead to a deterioration in the business environment and only 6% anticipate that Brexit will result in an improvement in the business climate compared with 14% a year ago. Large corporates are pulling in their horns, with just 12% of CFOs saying now is good time to take a risk and 44% expecting their own capital spending to be lower over the next three years.

“Indeed, CFOs are more negative about the effects of Brexit today than at any time since the EU referendum.”

David Sproul, senior partner and chief executive of Deloitte North West Europe, said:
“The drop in business confidence and the resultant impact on planned capital investment highlights the effect a possible no-deal Brexit is having on businesses across the UK. A deal with a sensible transition period would remove the uncertainty and should deliver a real boost to business spirits.

“Our survey also shows that beyond the future trade deal access to skills for business is an increasingly pressing issue. It’s crucial that a post-Brexit immigration system ensures that business has access to the skills it needs to thrive.”


Notes to editors

About the Deloitte CFO Survey
This is the 45th quarterly survey of Chief Financial Officers and Group Finance Directors of major companies in the UK.

The 2018 Q3 survey took place between 14th and 27th September 2018.

95 CFOs participated, including 18 FTSE 100 companies and 36 FTSE 250 companies.

The combined market value of the 66 UK-listed companies surveyed is £383bn, or approximately 15% of the UK quoted equity market.

The Deloitte CFO Survey is the only survey of major corporate users of capital that gauges attitudes to valuations, risk and financing.

For copies of previous CFO Surveys, please visit

About Deloitte
In this press release references to “Deloitte” are references to one or more of Deloitte Touche Tohmatsu Limited (“DTTL”) a UK private company limited by guarantee, and its network of member firms, each of which is a legally separate and independent entity. Please see for a detailed description of the legal structure of DTTL and its member firms.

Deloitte LLP is a subsidiary of Deloitte NWE LLP, which is a member firm of DTTL, and is among the UK's leading professional services firms.

The information contained in this press release is correct at the time of going to press.

For more information, please visit

Member of Deloitte Touche Tohmatsu Limited

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