Post-Brexit vote confidence plummets among leading CFOS

More than four in five will cut spending next year...

ESRI, Brexit, FDI, Foreign Direct Investment, corporation tax, Ireland, EU,

Image: Rollingnews.ie

A new survey from Deloitte has found that at least four out of every five Chief Financial Officers at top UK firms intend to cut capital spending and reduce hiring over the next year.

The accounting firm polled 132 CFOs from June 28th to July 11th to gauge the confidence of leading financial players in the UK following Britain's decision to leave the European Union.

In the survey, 82% of CFOs confirmed they are planning capital spending cuts, whilst 83% anticipate a slowdown in hiring.

The figures were up dramatically from the respective 34% and 29% findings in the previous survey.

Some 67% also forecast that Brexit will result in a long-term deterioration of the UK's business environment.

Almost all admitted uncertainty was currently at levels above normality.

The survey of companies including the likes of International Consolidate Airlines Goroup (IAG) and real-estate broker Foxtons Group showed major economic pessimism and the kind of risk averse planning that could prompt a recession.

In a statement, Deloitte's chief UK economist Ian Stewart said:

"Perceptions of uncertainty have soared to levels last associated with the euro crisis five years ago.

"The spike in uncertainty has had a toxic effect on business sentiment, with optimism dropping to the lowest level since our survey started in 2007 – lower, even, than in the wake of the failure of Lehman in late 2008."

“There has been a marked shift to more defensive balance-sheet strategies in the wake of the referendum, with a focus on reducing costs, building up cash flow and caution on all forms of spending."

Deloitte did note that Teresa May being instated as the new British Prime Minister might go some way to providing stability.

Markit will publish a one-off preview of its monthly purchasing managers' index (PMI), providng the first contrete indication of how business activity is coping.