Bloomberg News

U.K. Finance Chiefs Least Optimistic Since 2009, Survey Shows

October 09, 2011

Oct. 10 (Bloomberg) -- Optimism among chief financial officers of major U.K. companies fell to its lowest in 2-1/2 years in the third quarter, amid growing concern about the global economic outlook, according to a survey by Deloitte LLP.

Forty-three percent of CFOs surveyed think Britain will fall back into recession, up from 33 percent last quarter, the survey showed. Risk appetite fell at its fastest rate since Deloitte conducted the first such survey in 2007 and, for the first time in a year, cost-control is CFOs’ top priority. The financial industry showed the least risk-appetite and consumer goods and technology companies the most, the survey showed.

“This quarter’s CFO Survey shows that uncertainty and weaker growth have had a marked effect not just on corporate sentiment but also on priorities,” said Margaret Ewing, a senior Deloitte partner and former CFO of airport operator BAA. “The world has become riskier and more uncertain for corporates. Most think that a period of margin expansion is drawing to an end. CFOs are responding with a renewed focus on cost-control.”

The Bank of England announced last week its biggest stimulus since the depths of the recession, citing “vulnerabilities” related to euro-area turmoil. Governor Mervyn King said the move, the first loosening of U.K. monetary policy since 2009, was a response to what may be the worst-ever financial crisis. Britain’s economy grew less than initially estimated in the second quarter, with gross domestic product up 0.1 percent, rather than the 0.2 percent previously published, data last week showed.

Most CFOs expect hiring and investment to decline and profit margins to narrow during the next 12 months, according to the survey. They see the greatest opportunities for growth outside Britain.

The Deloitte survey was conducted between Sept. 14 and Sept. 28. A total of 114 CFOs participated, including those of 30 companies in the benchmark FTSE 100 Index and 41 in the FTSE 250 Index. The rest are with other U.K. listed companies, large private companies and U.K. subsidiaries of major companies listed overseas.

--Editors: Alan Purkiss, Peter Branton

To contact the reporter responsible for this story: Tim Farrand at

To contact the editor responsible for this story: Rodney Jefferson at

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