LONDON — More than eight in 10 UK company financial chiefs said their business faced a high level of uncertainty, according to a survey by accounting firm Deloitte.
Chief financial officers in the UK and Germany reported the least stable business environment, with 85% saying they face high uncertainty, compared with a European average of 61%.
“Results from the UK reflect continued uncertainty around the impact of Brexit,” Deloitte said. “In Germany, the country’s reliance on exports could be affected by geopolitical risks as well as falling demand.”
The UK began talks with European Union negotiators over the terms of Britain’s exit from the EU in March, but disagreements over the size of the fee that Britain would need to pay before it signs a special trade deal have left businesses unclear over what will happen when Brexit happens in 2019.
Prime Minister Theresa May has signalled she intends to take the UK out of the 28-nation single market trading bloc, potentially forfeiting the financial passport and putting an end to EU freedom of movement.
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Despite the lack of clarity, CFOs have remained optimistic.
When asked how they feel about the financial prospects for their company compared to three to six months ago, 38% of said they are more optimistic than before, with 31% in the UK feeling more upbeat. Turkey, which has struggled with terrorist attacks and political volatility is the only country where optimism has fallen.
In the UK, just under two thirds of CFOs predicted revenue would grow, with 14% expecting revenues to shrink.
David Sproul, senior partner and chief executive at Deloitte UK, said: “European businesses have faced a wide range of uncertainties in the past year, including Britain’s Brexit vote and then the Dutch and French elections. But we are finding that businesses are learning to live with political risk.”
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Around 1,500 CFOs in 19 countries were interviewed as part of the quarterly study.