Business confidence at highest level for 3 1/2 years

February 2014

The recent CFO survey carried out by Accounting firm Deloitte seems to show that expansion and investment are the priorities for 2014. This survey polls the Chief Financial Officers of the UK’s largest companies and finds them in a positive mood. 57% of CFOs say that this is a good time to take risks by investing and expanding, and indeed business optimism is running at its highest level in three and a half years.

The major blocks to business activity that we have seen in recent times have been the general uncertainty in the market, and the low levels of availability of credit. These issues have both eased substantially and CFOs perceptions of financial and economic uncertainty have dropped to the lowest level in more than 3 years.  

Some of the figures that have emerged are as follows:

  • - CFOs attach 16% probability to the UK falling back into recession in the next two years (down from 40% a year ago).
  • - Large corporates have good access to capital and CFOs are more positive about financing their businesses with equities or bonds than at any time in the last 6 years.
  • - 80% of CFOs say that bank credit offer an attractive source of finance.
  • - 88% of CFOs expect M&A activity to increase over the next 12 months.
  • - The majority of CFOs believe inflation will be running well above Bank of England targets in two years’ time and therefore expect the Bank to raise interest rates by the middle of 2015.