Eight in 10 CFOs (81%) say they expect the long-term business environment to be worse as a result of the UK leaving the EU, according to Deloitte’s latest CFO Survey.
The firm said this is the highest level since the EU referendum in 2016, and the survey shows that pessimism about the short-term effects of Brexit “remains elevated”, with 49% of CFOs expecting to reduce their own capital expenditure and 22% cutting M&A as a consequence of Brexit.
However, the firm said there has been little change in confidence and risk appetite among CFOs. Of those surveyed, 13% say they are more optimistic about the prospects for their company than they were three months ago, compared to 10% in Q4 2018. In addition, 9% of CFOs now agree it is a good time to be taking greater risk onto their balance sheets, up from 7% last quarter.
Ian Stewart, chief economist at Deloitte, said: “Put mildly, it’s been a turbulent few weeks and there’s been little change in confidence and risk appetite among CFOs, as many priced in a tougher environment at the start of the year.
“They went into March braced for tough times and the latest round of Brexit uncertainties have not materially changed that picture. When expectations are already low, it’s harder to be disappointed.”
Some 89% of CFOs participated, including CFOs of 48 FTSE 100 and FTSE 250 companies. The total market value of the listed companies that participated is £377bn, approximately 15% of the UK quoted equity market.