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CFO risk appetite hits new high

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29th Sep 2014
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Risk appetite among chief financial officers (CFOs) of the largest companies in the UK has reached a seven year high, according to Deloitte.

The new survey for Q3 2014 reveals that despite economic and financial uncertainties, more than 70% of CFOs surveyed believed now was a good time to take risk on to their balance sheets.

This is a significant shift up from 65% in Q2 and three times the level seen during the same period last year when it was just 23%.

The survey also showed that around 56% of CFOs said the level of economic and financial uncertainty facing their business was “above normal, high or very high”, up from 49% in the last quarter.

Perceptions of risk among CFOs completing the survey before the Scottish independence referendum were twice as high as for those who responded after. The upcoming 2015 general election and a future referendum on EU membership were also listed as a higher risk to business than deflation and Euro area weaknesses.

Despite this, CFOs were more positive about government policies and had given a strong vote of confidence to the Bank of England.

Ian Stewart, chief economist at Deloitte, said: “What surprises me is that, despite all the news around Ukraine, the Middle East and weakness in the euro area, risk appetite among CFOs has risen.

“CFOs have become more positive about official policy – from government, regulators and the Bank of England. Confidence has risen in 11 separate areas of policy, and most markedly in public spending, tax policy, immigration and financial regulation,” Stewart said.

The survey results also found that credit was cheaper and more available than any time in seven years.

In total Deloitte surveyed 118 CFOs at 28 FTSE 100 companies and 40 FTSE 250 companies. The rest were CFOs of other UK-listed companies, large private companies and UK subsidiaries of major companies listed overseas.

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