More than eight in ten chief financial officers (CFOs) expect the long-term business environment to deteriorate as a result of the UK leaving the EU.
The 83% of CFOs who said they were concerned was the highest reading under Deloitte’s quarterly CFO survey since the referendum in June 2016.
Meanwhile, the percentage of CFOs who think that now is a good time to take a greater risk onto their balance sheets has fallen to 4%, the lowest since the failure of Lehman Brothers in 2008.
Ian Stewart, chief economist at Deloitte, said: “Events in the last three years, and recent news suggesting the economy shrank in the second quarter, have added to worries about the impact of Brexit.
“This is not solely a question of the long-term outlook. Brexit has not happened, but it is acting as a drag on corporate sentiment and spending.”
Almost two thirds (62%) of CFOs expect to reduce hiring in the next three years as a result of Brexit and almost half (47%) expect to reduce capital spending, suggesting a cautious approach from businesses.
“Ironically, risk appetite in the corporate sector has slumped just as it has taken off in the equity market. Measures of financial market volatility have declined, even though a majority of CFOs rate uncertainty as being at high or very high levels,” said Stewart.
Brexit continues to be seen as the largest risk business face. However, rising geopolitical risks are now the second largest concern for business followed by the risk of greater protectionism in the US.
