Corporates starting to turn to the bond market

The head of Deloitte in Yorkshire and the North East said investor appetite is creating liquidity for the benefit of larger business- es.

“That’s a very good and positive feature of the market at the moment,” he told the Yorkshire Post.

Mr Jenkins was speaking after Deloitte published a new survey showing that business confidence among chief financial officers improved for the third consecutive quarter.

The Big Four accountancy firm said rising equity markets, exceptionally easy monetary policy and improving financial conditions have contributed to a more positive mood among major UK companies.

But Mr Jenkins warned that smaller companies are still struggling to access affordable credit and in spite of some encouraging emerging trends of alternative sources of lending he said there is not sufficient finance to “oil the wheels of entrepreneurship that this country needs”.

He highlighted the example of Seneca Partners, the Leeds-based turnaround firm which provides financial investment to small and medium-sized companies.

Deloitte’s survey of 120 chief financial officers from FTSE 100 and FTSE 250 firms shows that perceptions of uncertainty have dropped to their lowest level in two and a half years.

The survey underlines the extent to which confidence depends on what is happening in Europe; the CFOs believe there is a less than one in five chance that the euro currency will break up in the next year.

At the same time, it highlights a rising appetite for taking more corporate risk on to the balance sheet and continued improvements in credit conditions for large companies.

The proportion of CFOs prioritising cost control dropped from 50 per cent in the last quarter of 2012 to 42 per cent in the first quarter and those prioritising raising cash flow dropped from 49 per cent to 39 per cent.

“Sustained declines in uncertainty offer the prospect of stronger corporate activity to come,” added Mr Jenkins.