UK: Deloitte Monday Briefing: CFO Survey Shows Record Corporate Risk Appetite

Last Updated: 9 April 2014
Article by Ian Stewart

Most Read Contributor in UK, August 2017
  • The first quarter Deloitte Survey of UK Chief Financial Officers is published this morning. This is the 27th CFO survey and it shows that corporates are gearing up for investment and expansion.
  • 126 CFOs, including 27 at FTSE100 companies, took part in the survey between 6th and 24th March. Respondent companies account for 26% of the quoted UK equity market. The full survey report is available at:

  • Significantly reduced economic uncertainty and much improved financing conditions have helped drive corporate risk appetite to record levels. 71% of CFOs say now is a good time to take risk on to their balance sheet, the highest reading in six-and-a-half years, and more twice the level of a year ago.
  • The environment for business is continuing to improve. Our economic and financial uncertainty index has fallen by one third over the last year. Easy monetary policy and favourable financing conditions have created a capital-rich environment for big UK corporates.
  • CFOs report that credit is more available, and more keenly priced, than at any than at any time in the last six-and-a-half years. A period of corporate deleveraging seems to be over and CFOs increasingly see scope for companies to raise leverage. Expectations for equity issuance and bank borrowing have seen a strong recovery since the lows in late 2011.
  • The default position of large corporates in the past six years – bullish on emerging markets, cautious on developed markets – seems to be reversing. CFOs have become more confident about growth in developed economies, particularly the UK. CFOs increasingly see growth here in the UK, and established markets such as the US and Euro area, as the key drivers of their corporate investment plans.
  • Plans for hiring, capital spending and discretionary spending are at new three-and-a-half-year highs. A record 95% of CFOs expect merger and acquisition activity to rise over the next year.
  • CFOs have become markedly more confident about the outlook for UK inflation. Last quarter a majority expected CPI inflation to significantly overshoot its 2.0% target in 2 years' time. Most now expect inflation to be around 2.0%. On average CFOs expect interest rates to rise by 0.25% over the next year.
  • Consumer spending has been a significant driver of the early stages of the UK recovery. This quarter's CFO Survey suggests that the corporate spending will play an increasingly prominent role as the recovery matures.


UK's FTSE 100 ended the week up 0.7%.

Here are some recent news stories that caught our eye as reflecting key economic themes:


  • US non-farm payrolls showed that 192,000 new jobs were created in March, all coming from the American private sector
  • British new car registrations reached their highest monthly level since 2004 in March, with consumers take advantage of cheap credit deals
  • The vice president of the European Central Bank (ECB) said that the ECB is "really concerned with the regime of [European] low inflation"
  • Spanish 5-year bond yields briefly fell below those of US 5-year Treasury bills, for the first time since before the global financial crisis
  • Global initial public offerings (IPOs) almost doubled in value in the first quarter of 2014, with the value of European IPOs reaching the highest level since 2000 according to data from Thomson Reuters
  • The managing director of the International Monetary Fund (IMF) warned that the political crisis around Ukraine poses a threat to the global economy unless it is "well managed"
  • Russia threatened to retaliate against US diplomatic missions after JPMorgan Chase blocked a money transfer from a Russian embassy as part of sanctions over Crimea
  • The gap between property prices in London and the rest of the UK have reached a record high, with houses in the capital now more than twice the average for the rest of the UK
  • China's Premier Li Keqiang pledged to speed up construction of railways and housing for the poor, to stimulate economic growth and reassure investors
  • Luxury handbag maker Prada reported slowing profits, with sales hit by a continued weakness in European markets and a crackdown on government spending in China
  • Russia will this year overtake the UK as the country with the second-most mall space in Europe, behind France, according to Cushman and Wakefield
  • British retailer Marks & Spencer committed to new stores in major French cities, Brussels, Amsterdam, and potentially also Italy and Spain
  • Research by Deutsche Bank has revealed that UK reserves of foreign currency – used to defend the pound during crises –stand at only $70bn, less than Poland
  • New data show that France's public deficit stood at 4.3% of output last year, compared with a target of 4.1%
  • The numbers of Chinese receiving driving lessons in South Korea has trebled, following stricter government rules on learning to drive in China
  • The world's first 24-hour cupcake vending machine, run by Sprinkles Cupcakes, opened in New York and attracted a queue that stretched past several blocks, despite freezing weather – selling like cupcakes.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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