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UK businesses are less likely to borrow money now than at any point since the financial crash of 2008, according to a survey from Deloitte.
The survey of a number of CFOs across leading businesses in the UK found that only 28% of CFOs expect their businesses’ demand for credit to increase.
Around 70% of the CFOs surveyed believed that credit is costly and 45% said that credit is hard to get.
However, CFO’s perception of risk has eased since its high in October. On average they believe that inflation will fall in a year’s time. Nonetheless they still believe that inflation will be around 3.3% in two years time.
Ian Stewart, chief economist at Deloitte, said: “The most aggressive tightening of monetary policy in more than 30 years is reshaping corporate attitudes to debt. Not since the credit crunch have CFOs rated debt as being less attractive as a source of finance for their businesses than they do today.
“When interest rates were at very low levels, debt finance easily eclipsed equity as a source of finance. CFOs now see them as being roughly on par.”
Stewart added: “In the last two years CFOs have had to deal with the biggest inflationary shock since the late 1980s. But the tide seems to be turning and concerns about energy supply and prices have fallen back. CFOs’ perceptions of inflation risk have dropped from October’s peak, and expectations for supply shortages, recruitment difficulties and inflation have eased.”
The survey was conducted in December and 78 CFOs participated in the latest survey, including CFOs of 17 FTSE 100 and 32 FTSE 250 companies.
