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Deloitte CFO Survey: Political and economic uncertainty compounds Brexit fears

8 July 2019

  • More than eight in ten CFOs (83%) say they expect the long-term business environment to deteriorate as a result of the UK leaving the EU
  • Just 4% of CFOs think now is a good time to take a greater risk onto their balance sheets
  • Low levels of corporate risk appetite stand in stark contrast to the buoyant mood of equity investors
  • CFOs see geopolitics as posing the second greatest risk to their businesses 

More than eight in ten CFOs (83%) say they expect the long-term business environment to deteriorate as a result of the UK leaving the EU, according to Deloitte’s latest Q2 CFO Survey. This is the highest reading since the referendum in June 2016.

Meanwhile, the percentage of CFOs who think that now is a good time to take a greater risk onto their balance sheets has fallen to 4%, the lowest since the failure of Lehman Brothers in 2008.

Ian Stewart, chief economist at Deloitte, explains: “Events in the last three years, and recent news suggesting the economy shrank in the second quarter, have added to worries about the impact of Brexit. This is not solely a question of the long-term outlook. Brexit has not happened, but it is acting as a drag on corporate sentiment and spending. Almost two thirds (62%) of CFOs expect to reduce hiring in the next three years as a result of Brexit and almost half (47%) expect to reduce capital spending, suggesting a cautious approach from businesses.

“Ironically, risk appetite in the corporate sector has slumped just as it has taken off in the equity market. Measures of financial market volatility have declined, even though a majority of CFOs rate uncertainty as being at high or very high levels.”

The Deloitte CFO Survey gauges sentiment amongst the UK’s largest businesses. 79 CFOs participated, including CFOs of 48 FTSE 350 companies. The total market value of the listed companies that participated is £345 billion, approximately 15% of the UK quoted equity market. The Q2 2019 CFO survey ran between 12th and 28th June 2019.

Investor versus corporate sentiment
While CFOs are battening down the hatches, investor confidence has surged, with the FTSE breaching 7,600 in July.

Ian Stewart said: “Equity valuations imply that investors believe central banks will save the day but the downbeat mood of UK CFOs suggests corporates are less sanguine.”

Slump in confidence and concerns over hiring prospects
The survey shows that pessimism about the short-term effects of Brexit remains elevated, with 62% of CFOs expected to reduce hiring – the highest level in three years – and 25% cutting M&A as a consequence of Brexit.

There has also been a drop in confidence among CFOs. Of those surveyed, 9% say they are more optimistic about the prospects for their company than they were three months ago, compared to 13% in Q1 2019.

Geopolitical risks heighten
Brexit remains the largest risk business face, rated at 65 (on a scale of 0 to 100) compared to 62 in the previous quarter. However, rising geopolitical risks are now the second largest concern for business, increasing to 60 from 55 last quarter.

The risk of greater protectionism in the US is also rated at 60, up from 49 in Q1.

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

Corporates remain wary
Corporates remain focused on defensive strategies with 52% citing cost control as a strong priority, down percentage point from Q1. This is followed by increasing cash flow, a strong priority for 43% of CFOs, down from 52%.

Richard Houston, senior partner and chief executive of Deloitte North and South Europe, concludes: “The continued challenging and uncertain macro-economic environment is weighing on the corporate sector and its job creation and investment plans. Companies are looking for more certainty around our country’s economic future, as they prepare themselves for a post-Brexit environment.”


Note to editors

About the Deloitte CFO Survey
This is the 48th quarterly survey of Chief Financial Officers and Group Finance Directors of major companies in the UK. The 2019 first quarter survey took place between 12th and 28th June. Seventy nine CFOs participated, including the CFOs of 19 FTSE 100 and 29 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 55 UK-listed companies surveyed is £345 billion, 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.

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