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With opinion polls tight, a survey of chief financial officers (CFOs) indicates they are holding off hiring new staff and reluctant to spend on new equipment before the public vote. Risk appetite has fallen to a three-year low, according to the poll of 120 CFOs of FTSE 350 and other large private companies.
The survey by consultancy Deloitte put the referendum at the top of CFOs’ risk lists, eclipsing longstanding concerns about turmoil in emerging markets and growth in the eurozone.
“A fog of uncertainty has descended on the corporate sector. Perceptions of financial and economic uncertainty are back to levels last seen in early 2013 as the euro crisis abated,” said Deloitte chief economist, Ian Stewart.
The quarterly poll found support for staying in the EU had risen to 75% of CFOs, up from 62% in the final quarter of 2015. But Deloitte noted that in that earlier poll, 28% of CFOs said their position would depend on the outcome of David Cameron’s renegotiation of UK membership. That response was not an option in this quarter’s survey.
In the latest survey, conducted after the prime minister announced his EU deal and the 23 June referendum date, 8% of CFOs said UK business would benefit from leaving the EU and 17% were uncertain of their position or preferred not to say.
Stewart said the rise in support for staying in the EU and the increase in risk aversion mirrored what the consultancy had seen among its clients.
“Since the announcement of the date of the referendum, demand from clients to understand the risks has gone up. A year ago it was a distant possibility, now we have got a date and people are more focused on the issues,” he said.
When CFOs were asked how they thought EU membership had benefited the UK economy and UK businesses, 89% said it had helped UK export performance and 86% said it had attracted foreign direct investment.
Chiming with business groups’ complaints over red tape, the survey showed the legal, regulatory and compliance framework aspects of UK membership ranked lowest with just 15% of CFOs saying they benefit the UK.