Press releases

Record proportion of UK CFOs expect significant operating cost rises

19 April 2022

  • CFOs report a record level of risk driven by geopolitics and inflation;
  • Over a quarter of CFOs report significant or severe levels of supply chain disruption in Q1;
  • Finance leaders appear sceptical about the Bank of England hitting its inflation target, with a record* proportion (78%) expecting inflation to exceed 2.5% in two-years’ time; and
  • CFOs are still looking to grow to their businesses, with a continued focus on investment and expansion as a top balance sheet priority.

Faced with a more uncertain economic climate, a record** number of finance leaders (98%) anticipate operating costs to rise in the year ahead, according to Deloitte’s UK CFO Survey Q1 2022. Almost half of CFOs (46%) expect these rises to be significant.

In light of cost increases, there has also been a sharp deterioration in the outlook for corporates’ margins. A majority of CFOs (71%) believe operating margins will fall over the next 12 months, compared to 44% in the previous quarter. But despite this, three-quarters expect revenues to rise over the next year.

Meanwhile, capital spending remains a strong priority for 21% of CFOs, even with a more challenging operating environment. Although this has dropped from last quarter’s record high (37%), it remains considerably above the five-year average of 14%.

Conducted between 16 and 30 March 2022, Deloitte’s latest quarterly CFO Survey captured sentiment amongst the UK’s largest businesses, against a backdrop of ‘Plan B’ COVID-19 restrictions easing and after the Russian invasion of Ukraine. The latest survey saw 89 CFOs participate, including CFOs of 22 FTSE 100 and 34 FTSE 250 companies. The combined market value of the 58 UK-listed companies that participated is £526 billion, approximately 20% of the UK quoted equity market.

Rising uncertainty and risk

The invasion of Ukraine has heightened the level of financial and economic uncertainty facing businesses. Over half of CFOs (56%) say that the level of uncertainty facing their business is high or very high.

Geopolitics has risen sharply as the top risk facing CFOs’ businesses. With the exception of the pandemic during Q2 and Q3 2020, the risk rating assigned to geopolitics is higher than any other factor since the question was first asked in 2014. Rising inflation, the prospect of further interest rate rises, and persistent labour shortages, also rank high on the list of CFO concerns.

Ian Stewart, chief economist at Deloitte, says:

“Rising geopolitical risk in the wake of the invasion of Ukraine and alongside high inflation mean that the external challenges faced by business are greater today than at any time in the last eight years. These risks now far eclipse Brexit and the pandemic, which have dominated the list of CFO concerns in recent years. Over the next year, CFOs believe a mix of rising costs and slower growth are set to squeeze margins.

“In spite of this - as finance leaders have become accustomed to navigating a more volatile business environment - they remain focused on capital spending and growing their businesses.”

Inflation and interest rates

Over three-quarters of CFOs (78%) expect inflation to exceed 2.5% in two-years’ time – the highest reading on record*. Meanwhile more than half (53%) expect inflation to settle between 2.5% and 3.5% in two-years’ time and a quarter expect it to remain above 3.5%.

CFOs expect interest rates to rise substantially over the next 12 months. On average, they expect the Bank of England’s base rate to be 1.5% in a year’s time, double its present level of 0.75%, but below current financial market expectations.

Labour shortages, recruitment difficulties and supply chains

Just over a third (35%) of finance leaders report that their businesses have faced significant or severe recruitment difficulties in Q1 – a slight improvement from Q4 2021 (46%). CFOs anticipate labour shortages will persist, with around one in four saying these will be significant or severe in a year’s time.

In Q1, more than a quarter of CFOs reported significant or severe levels of supply chain disruption. A modest improvement in conditions is expected, with one in six CFOs anticipating similar levels of disruption in a year’s time.

Richard Houston, senior partner and CEO of Deloitte, comments:

“It’s clear that businesses are operating in an increasingly uncertain and challenging economic and geopolitical environment.

“However, CFOs are not reporting a widescale shift to defensive strategies, such as cost cutting, seen at the beginning of the pandemic. Introducing new products, services or entering new markets remain the top balance sheet priorities. This continued focus on investment will be vital for resilience moving forward.”



Notes to editors

*Since the question was first asked in 2013
**Since the question was first asked in 2011

About Deloitte’s CFO Survey

This is the 59th quarterly survey of Chief Financial Officers and Group Finance Directors of major companies in the UK. The 2022 first quarter survey took place between 16 and 30 March 2022. A total of 89 CFOs participated, including the CFOs of 22 FTSE 100 and 34 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 58 UK-listed companies surveyed is £526 billion, or approximately 20% 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 NSE 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

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