UK CFOs smug as uncertainty becomes ‘new normal’

London: Britain’s chief financial officers are turning optimistic as they head into the new year, though they intend to be cautious amid the cloudy economic outlook, according to Deloitte.

The number of CFOs that are more positive about the prospects for their companies outweigh those who are more pessimistic by the most in 18 months, the fourth-quarter survey published Thursday showed. Despite that, 9 in ten said they face high levels of economic and financial uncertainty, just a fraction lower than the 95 per cent figure seen shortly after the UK’s June vote to leave the European Union. Appetite for risk also remained diminished.

“Uncertainty is the new normal in business life,” said David Sproul, chief executive at Deloitte. “2016 has been a tumultuous year but the optimism seen in this survey does give us some confidence heading in to 2017.”

Despite the initial shock from the Brexit vote, the country’s economy has maintained momentum as economic data proved to be better than many expected. But with potentially two years of exit negotiations set to begin in the new year, businesses are looking to stay flexible.

Nearly half of CFOs said that cost reduction and improving cash flow were key priorities as companies look to reign in spending. Leaving the EU remains their top concern, with two-thirds expecting a deterioration in the post-Brexit business environment, compared with 14 per cent thinking there will be an improvement.

“The long-term uncertainties around Brexit remain a drag on spending plans, even though the fact there hasn’t been an immediate downturn in the economy has made people a lot more optimistic about the short-term outlook,” chief economist Ian Stewart said in an interview with Bloomberg Television.

The Deloitte report was compiled from a survey of 119 CFOs, including those of FTSE-listed companies with a combined market capitalisation of 396.3 billion pounds ($484 billion, Dh1.78 trillion), conducted from November 29 to December 12.