Confidence among finance bosses tumbles as Brexit fears continue to increase

Simon Manning, partner at Deloitte in Yorkshire, says 'Business sentiment is highly sensitive to political developments and surprises.'
Simon Manning, partner at Deloitte in Yorkshire, says 'Business sentiment is highly sensitive to political developments and surprises.'
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Confidence among Britain’s finance chiefs has tumbled in the wake of the General Election, while worries about Brexit’s impact on business continues to rise.

A quarterly survey from accountancy giant Deloitte has shown that 42 per cent of chief financial officers (CFO) are less upbeat about their company’s prospects than they were during the last quarter, when as few as 17 per cent reported a decline in confidence.

Only 18 per cent reported a brighter outlook in the second quarter, down from 31 per cent during the previous three months.

The poll – which quizzed 122 CFOs from FTSE 350 and other large private companies – also recorded a more downbeat view on Brexit, with 72 per cent expecting the business environment to worsen after the UK leaves the EU, up from 60 per cent in the first quarter.

Just eight per cent said Brexit would improve conditions for companies.

It marks the highest level of pessimism surrounding the impact of Brexit since the referendum last year, with CFOs adding that Britain’s divorce from the bloc remains the biggest risk to business, followed by weak demand in the UK.

Corporate spending is also expected to take a hit as a result of Brexit, with 33 per cent forecasting a drop in capital expenditure, while 38 per cent say Britain’s divorce from the bloc will negatively impact on hiring, compared to 30 per cent in the first quarter.

Simon Manning, partner at Deloitte in Yorkshire, said: “Business sentiment is highly sensitive to political developments and surprises.

“The outcome of the General Election, like the result of last June’s EU referendum, was hugely unexpected and has knocked optimism.

“A period without such large shocks, and with the negotiations with the EU gaining direction and momentum, should help bolster business sentiment.”