Press releases

Deloitte CFO Survey: Brexit tops risk list

4 April 2016

  • Support rises among CFOs for UK membership of the EU
  • CFOs say EU membership helps UK exports, FDI and global influence
  • Uncertainty about economic environment rises and risk appetite drops
  • CFOs focus on defensive balance sheet strategies

Support for the UK remaining a member of the European Union has risen among Chief Financial Officers (CFOs) of the UK’s largest companies, according to Deloitte’s latest CFO Survey.

The business environment has become more challenging, with CFO perceptions of uncertainty up sharply and risk appetite at three year lows. CFOs are prioritising defensive strategies and plans for hiring and capital spending have dipped.

120 CFOs of FTSE 350 and other large private companies participated in the Q1 2016 CFO Survey.

Britain’s Future in the European Union

Repeating a question asked in the Q2 and Q4 2015 Surveys, Deloitte asked CFOs whether it is in the interests of UK businesses for the UK to remain a member of the EU:

  • 75% favour the UK remaining in the EU, up from 62% in Q4 2015 and 74% in Q2
  • 8% say UK business would benefit from leaving the EU, up from 6% in Q4 2015 and 2% in Q2
  • 17% were uncertain of their position or preferred not to say, up from 4% in Q4.*

CFOs see benefits to EU membership

CFOs were asked how they believe EU membership has benefited the UK economy and UK businesses.

89% say membership has helped UK export performance and 86% say it has attracted foreign direct investment. 71% say membership has contributed to the success of UK financial services and 68% say it has boosted the UK’s influence and connections with the rest of the world. All these measures are broadly unchanged since this question was asked in the Q2 2015 Survey.

78% of CFOs say the UK benefits from the free movement of people, though this has fallen from 87% in Q2 2015.

The legal, regulatory and compliance framework aspects of UK membership ranked lowest with just 15% of CFOs saying these benefit the UK, down from 18% in Q2 2015.

Referendum tops list of business concerns

CFOs also rank the EU referendum as the biggest risk their businesses face. On a scale of 0 to 100 (where 100 is the greatest risk) CFOs gave the EU referendum a risk rating of 54, up from 50 in Q4 2015. The EU referendum ranked ahead of economic weakness in the euro area (48), weak demand in the UK (46) and the prospect of higher interest rates in the UK (44).

Planning for Brexit?

26% of CFOs say their company has made, or is in the process of making contingency plans for a possible British exit of the EU. However, 53% have made no such plans.

David Sproul, senior partner and chief executive of Deloitte, said:

“These results show a high level of support among Chief Financial Officers for the UK remaining a member of the European Union.

“CFOs see significant benefits in UK membership, particularly in terms of helping UK exports, attracting investment and strengthening the UK’s influence and connections with the wider world.

“However, we are already seeing the unsettling effect of the referendum on business sentiment. Our survey shows declining risk appetite among CFOs, with the referendum rated as the top risk their business faces, and we have seen a marked slowdown in M&A activity as businesses put plans on hold for now.

“While voices on both sides of the debate argue about the potential economic impact of a ‘leave’ vote, the referendum appears to already be contributing to a slowdown.”

Uncertainty rises and risk appetite falls

83% of CFOs say the level of uncertainty facing their business is above normal, high or very high, up from 64% in Q4’s Survey and the highest level since Q4 2012.

75% of CFOs say now is a bad time to rake risk onto their balance sheets, up from 63% in Q4 and the highest level since Q4 2012.

CFOs stay on the defensive

CFOs continue to focus on defensive balance sheet strategies. Just 18% say they plan to increase hiring within their companies, down from 40% in Q4 and the lowest level since Q4 2012. Though falling from 44% in Q4, 40% of CFOs say cost reduction is a strong priority. 13% say asset disposals are a priority, up from 12% in Q4 and the highest level since Q1 2013.

CFOs continue to place less emphasis on expansionary strategies. 16% say increasing capital expenditure is a strong priority, the third consecutive drop and the lowest level since Q2 2014. For the fourth Survey in a row, CFOs’ focus on expanding by acquisition has fallen, with just 18% saying this is now a high priority.

Equity market jitters

77% of CFOs say now is a bad time for UK corporates to issue equity, up from 49% in Q4 and the highest level since Q2 2013. 26% say that equity offers an attractive source of external funding for their business, down from 37% in Q4. This is the third consecutive quarter this has fallen and it is at its lowest level since Q4 2012.

Ian Stewart, chief economist at Deloitte, said:

“A fog of uncertainty has descended on the corporate sector. Perceptions of financial and economic uncertainty are back to levels last seen in early 2013 as the euro crisis abated.

“Now the dominant concern is the EU referendum, which tops the corporate worry list, eclipsing longstanding concerns about emerging markets and growth in the euro area.

“Rising uncertainty has eroded corporate risk appetite. Corporates are pulling in their horns, with expectations for hiring and capital spending at three year lows.”


Notes to editors
* In the Q4 2015 Survey 28% of CFOs said their position would depend on the outcome of the Prime Minister’s renegotiation of UK membership. This response was not an option in this quarter’s survey.

About the Deloitte CFO Survey
This is the 35th quarterly survey of Chief Financial Officers and Group Finance Directors of major companies in the UK. The 2016 Q1 survey took place between 8th and 21st March.

120 CFOs participated, including the CFOs of 20 FTSE 100 and 55 FTSE 250 companies. The rest were CFOs of other UK-listed companies, large private companies and UK subsidiaries of major companies listed overseas. The combined market value of the 84 UK-listed companies surveyed is £360 billion, or approximately 17% 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 Deloitte LLP, which is among the country's leading professional services firms.

Deloitte LLP is the United Kingdom member firm of Deloitte Touche Tohmatsu Limited (“DTTL”), a UK private company limited by guarantee, whose member firms are legally separate and independent entities. Please see for a detailed description of the legal structure of DTTL and its member firms.

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

Member of Deloitte Touche Tohmatsu Limited.

Mark Smith
Deloitte LLP
+44 020 7007 7082
+44 07590 041 301


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