UK businesses shying away from taking risks: Deloitte

Wednesday 06th February 2019 01:25 EST

According to a survey by accountancy firm Deloitte, major UK businesses' appetite to take on financial risk has fallen to its lowest level in nearly a decade due to fears of “the hardest of Brexits” and rising US protectionism. The world's fifth-largest economy is less than eight weeks away from leaving its biggest trading partner, the European Union, and British politicians have so far refused to back a transition deal negotiated by Prime Minister Theresa May. Deloitte's chief economist Ian Stewart said, “Corporates are positioned for the hardest of Brexits, with risk appetite at recessionary levels and an intense focus on cost control.”

Another report from a survey conducted by the Institute of Chartered Accountants in England and Wales (ICAEW) also showed falling sentiment and pointed to first-quarter economic growth of just 0.1 per cent, the joint-weakest since 2012. Businesses are not just afraid of short-term disruption: 78 per cent of the 110 companies surveyed by Deloitte said they expected Brexit to damage the economy over the long term. Less than 10 per cent of chief financial officers surveyed in the Deloitte survey said now was a good time to take greater risk on to their balance sheets, the lowest in over nine years. The survey polled chief financial officers from major UK-listed companies with a combined market value of £390 billion, as well as UK subsidiaries of large foreign firms, between January 8 and January 24. The ICAEW polled 1,000 accountants between October 22 and January 18.

comments powered by Disqus

to the free, weekly Asian Voice email newsletter