Yahoo Finance Brexit saps UK business confidence to lowest in a decade
Business leaders in the UK are now more pessimistic than ever about Brexit and say it will mean they employ fewer staff, according to a survey of chief financial officers (CFOs).
A monthly Deloitte survey in late June shows CFOs are more nervous about risk than at any time since the collapse of Lehman Brothers during the 2008 financial crisis.
Just 4% of the business leaders surveyed said it was now a good time to take risk onto their balance sheets, amid rising expectations of a no-deal Brexit led by Tory leadership rivals Boris Johnson or Jeremy Hunt.
Brexit topped the list of CFO’s concerns, with “geopolitical worries” and trade fears linked to the US-China trade war in second and third place.
Concerns about Brexit are not limited to the huge and unprecedented scale of disruption widely predicted in the short-term if Britain crashes out without a deal on 31 October.
READ MORE: Ex-Brexit chief on no-deal: ‘Everybody should be worried’
Business leaders are also increasingly downbeat about the post-Brexit British economy in the long run, suggesting they do not believe it can or will lead to positive changes for UK business.
83% believe it will lead to a deterioration of the economic environment, the highest figure at any time in the past three years.
“Events in the last three years have clearly added to, rather than reduced, worries about the impact of Brexit,” the Deloitte report said.
The report also suggests how Brexit is already denting the UK economy. “Brexit has not happened, but it is acting as a drag on corporate sentiment and spending,” according to its authors.
It says a majority (62%) of CFOs expect to hire fewer staff in the next three years, while 47% say they expect to cut capital investment in the future.
READ MORE: ‘Dramatic fall’ in finance jobs ahead of Brexit
Deloitte notes the significant gap between corporate pessimism and investor sentiment.
“The hesitant mood...is in marked contrast to the buoyant spirits recently on display in financial markets. Hints from the Federal Reserve and the European Central Bank of easier monetary policy to come have boosted equities,” it adds.
“Equity valuations imply that investors believe that central banks will save the day.”
