The chief financial officers (CFOs) at Britain’s biggest companies are more worried than their European counterparts about how Brexit will affect their firms’ bottom lines, according to a new survey by Deloitte.
65% of British CFOs say Brexit negotiations will be “bad for business,” compared with just 37% of European CFOs surveyed.
Deloitte, one of the world’s largest accountancy firms, collected data from 1,148 chief financial officers from 17 European countries between August and October this year for its third quarter European CFO Survey.
Here are some of the key results:
- Brits think Brexit will hurt business — 65% of UK CFOs say “Brexit negotiations will be bad for business.”
- CFOs from across Europe are more divided on Brexit — only 37% say that “the negotiations on the UK leaving the European Union will have a negative effect on their business.”
- Cost control is the main priority — The defensive measure is the top business strategy for CFOs in 75% of the countries participating in this quarter’s survey. That’s up from 63% in Q1 this year.
- The biggest impact from Brexit — CFOs in 16 countries, not including the UK, say increased complexity and cost of regulations will be the main legacy from Brexit.
- Other big impacts relate to immigration and trade — The Deloitte report says CFOs are also concerned about “restrictions in workforce mobility and decreased export opportunities due to non-tariff barriers.”
Brexit is not Europe’s only concern. Political uncertainties of varying degrees …
David Sproul, senior partner and chief executive at Deloitte UK, says: “Businesses across Europe have contended with a number of political shocks over the summer, reflected in high levels of uncertainty.
“Brexit features prominently among these shocks, with over one-third of Europe’s CFOs saying the negotiations on the UK leaving the EU will have a negative impact on their business. Concerns around regulatory change are the biggest concern but curbs on workforce mobility and export opportunities are also cited as risks to European businesses.”
Uncertainty over how Brexit will impact companies across the European Union — and especially in Britain — has been swirling ever since the UK voted to leave the European Union on June 23.
While there was some chance that Brexit could be blocked, it is looking less likely now. The High Court’s ruling that Theresa May must secure parliamentary approval before invoking Article 50 and withdrawing Britain from the European Union does not mean that Brexit is canceled.
Economists Jacob Nell and Melanie Baker at Morgan Stanley argue in their recent note that they see little prospect that parliament would try to block the triggering of Article 50 in the House of Commons, and that it is also highly unlikely that the House of Lords would stand in the way. So businesses need to prepare for a Brexit.
But Deloitte’s Sproul adds: “Brexit is not Europe’s only concern. Political uncertainties of varying degrees, from Spain to Turkey, upcoming elections in France and Germany and now, of course, the outcome of the US elections, weigh on the minds of business leaders.”