Deloitte CFO Survey: CFOs’ Brexit concerns at record high


Concerns about the effects of Brexit on the UK business environment have increased, according to Deloitte’s latest CFO Survey. Over the past quarter, optimism and risk appetite have fallen among CFOs and they look more willing to rein in corporate spending over the coming year.

CFOs increasingly expect business spending and hiring to slow post Brexit, with higher interest rates and inflation expected within twelve months.

Optimism, revenue expectations and risk appetite fall

Overall, 13% of CFOs say they are more optimistic about the prospects for their company than they were three months ago, down from 24% in Q2. 

  • 12% of CFOs say that now is a good time to be taking risk onto their balance sheets, down from 16% in Q2.
  • 31% of CFOs say they expect revenues to rise in the coming 12 months, down from 42% in Q2.

Brexit weighs on business spending plans

Seventy-nine per cent of CFOs say they expect the long-term business environment to be worse as a result of leaving the EU, up from 75% in Q2. This marks the third consecutive quarter that concerns about the impact of Brexit have increased and this reading is now the highest since the referendum.

CFOs are more negative on the effects of Brexit on their hiring and spending decisions. Fifty per cent  say hiring will slow over the next three years as a result of Brexit, up from 40% in Q2, and 44% say capital expenditure will slow, up from 34%. While increasing in each of the last three quarters, neither is as high as they were immediately after the referendum.

Concerns about Brexit risks increase

CFOs are more concerned about the risk Brexit poses to their business. Rating risks on a scale from 0 to 100, the effects of Brexit scored at 67 (up from 60 in Q2), followed by weak demand in the UK at 56 (down from 57 in Q2).

These are followed by the risk of greater protectionism in the US (53, up from 51 in Q2) and rising geopolitical risks worldwide (53, new question).

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

Sharper focus on cost control

CFOs have sharpened their focus on defensive balance sheet strategies with a greater emphasis on cost reduction than at any time in the last nine years. Fifty-three per cent cite cost control as a strong priority, up from 47% in Q2. This is followed by increasing cash flow, a priority for 48% of CFOs, down from 49%.

CFOs expect UK corporates to reduce capital expenditure over the next 12 months. The proportion of CFOs who expect to reduce their own capital expenditure as a consequence of Brexit is at its highest level in more than two years.

CFOs brace for higher interest rates and inflation

  • 56% of CFOs say they expect the Bank of England’s base rate to be at or above 1% within a year’s time, an increase from 38% in Q2.
  • 28% of CFOs expect the rate to be at 1.25% or above within a year. This is up from 2% in Q2’s survey.
  • 65% of CFOs expect inflation to be above 2.5% within a year (up from 39% in Q2). 34% forecast it to be between 1.6% and 2.5% (down from 57%).

Almost half of CFOs face a skills shortage

Forty-eight per cent of CFOs say that recruitment difficulties or skills shortages experienced by their business over the past quarter have increased, up from 44% in Q2. Fifty per cent say there has been no change (down from 55%) and just 1% say that filling roles has become easier.

Ian Stewart, chief economist at Deloitte, said: “With the UK’s planned departure from the EU less than six months away, Brexit worries dominate our latest survey of UK Chief Financial Officers.

“CFOs have become more pessimistic about the long-term effect of the UK’s departure from the EU: 79% expect Brexit to lead to a deterioration in the business environment and only 6% anticipate that Brexit will result in an improvement in the business climate compared with 14% a year ago. Large corporates are pulling in their horns, with just 12% of CFOs saying now is good time to take a risk and 44% expecting their own capital spending to be lower over the next three years.

“Indeed, CFOs are more negative about the effects of Brexit today than at any time since the EU referendum.”

Paul Schofield, Deloitte practice senior partner for the Eastern region (pictured), said: “The drop in business confidence and the resultant impact on planned capital investment highlights the effect a possible no-deal Brexit is having on businesses across the UK. A deal with a sensible transition period would remove the uncertainty and should deliver a real boost to business spirits.

“Our survey also shows that beyond the future trade deal, access to skills for business is an increasingly pressing issue. It’s crucial that a post-Brexit immigration system ensures that business has access to the skills it needs to thrive.”

About the Deloitte CFO Survey

This is the 45th quarterly survey of Chief Financial Officers and Group Finance Directors of major companies in the UK.

Ninety-five CFOs of FTSE 350 and other large private companies participated in the Q3 2018 CFO Survey. The combined market capitalisation of the 66 UK-listed companies who participated is £383bn, approximately 15% of the UK quoted equity market. The 2018 Q3 survey took place between 14th and 27th September 2018.


The Deloitte Cambridge office comprises 7 Partners and over 250 staff who deliver a full range of professional services to the East Anglian region. As well as focussing on the life sciences and technology sectors for which the region has become so renowned, the office has long standing specialisms in other sectors including the professions, consumer business and agriculture.

Deloitte LLP