British CFOs Fears of Long-Term Brexit Downturn Grow

An increasing number of chief financial officers expect Britain’s long-term business climate to worsen after the U.K. leaves the European Union, according to a Deloitte survey.

More than 80 percent of 89 British companies’ heads of finance, interviewed between March 26 and April 7, predict a deterioration of business conditions, the most since the Brexit referendum in June 2016, Deloitte said in its quarterly survey. In the short-term, about half of the financial chiefs expect to reduce hiring and capital expenditure, with 22 percent freezing merger and acquisition plans, according to the survey.

Brexit-related turbulence is making it harder for companies to deal with rising costs and tighter credit conditions. About half of the CFOs will prioritize increasing cash through the year, while predicting a decline in revenue for 2019, according to the survey.

“The continuation of uncertainty is causing much frustration for U.K. businesses,” said David Sproul, chief executive officer of Deloitte for north west Europe. “As well as stashing cash, many continue to delay investment. Businesses remain in a period of further limbo.”

A separate survey published on Monday by Morgan McKinley showed job vacancies in London’s finance industry have halved in two years as uncertainty over Brexit knocks business confidence.