Optimism on rise among chief financial officers but uncertainty is 'new normal'
Optimism among business finance chiefs has hit its highest level for 18 months but uncertainty has become the "new normal" for UK corporates, according to a report.
Deloitte's fourth- quarter survey of chief financial officers (CFOs) at a raft of Britain's biggest companies showed 27% are more optimistic about the prospects for their companies, up from 16% in the third quarter, thanks to robust UK growth.
It found that 22% were less optimistic, giving the first positive net balance since the second quarter of 2015.
But the survey of 119 CFOs of FTSE 350 firms and large private companies revealed that 89% believe they face economic and financial uncertainty, up from 88% in the previous three months.
Nearly half of those surveyed - 46% - expect to slash capital spending over the next year, while 48% see hiring slowing.
While this marks an improvement from earlier reports, Deloitte said companies remain focused on cost-cutting and other "defensive balance sheet measures".
David Sproul, senior partner and chief executive at Deloitte, said: "Uncertainty is the new normal in business life, but the challenge for corporates is to gauge and mitigate external risks while staying open to opportunities."
Despite increased optimism, the report found two thirds of CFOs believe the long-term business environment will be worse off after Brexit.
This is up from 65% in the second quarter.
The direct impact of Brexit on corporate spending has eased though, with 35% of CFOs saying their own capital spending will decrease because of the UK's decision to leave the EU, down from 58% in the second quarter.
The report showed that 39% say their hiring will slow as a direct result, down from 66% in the second quarter, and 19% say merger and acquisition activity will be weaker, down from 40%.