Deloitte’s latest survey reveals that UK CFOs have shifted toward a more cautious outlook as business optimism plummets to a two-year low. A net 26 percent of CFOs reported increased pessimism about their company’s future, marking a notable shift from the optimism seen in mid-2023. Although confidence has fallen, it remains significantly higher than the lows during 2020 and 2022. As National Insurance Contributions rise in 2025, CFOs are focusing on cost reductions as their primary response. The broader trend indicates a corporate squeeze on discretionary spending, with 58 percent of CFOs expecting cuts, and hiring expectations at a four-year low. Only 18 percent of CFOs see this as a good time to take on additional risk.
Inflation and interest rates are less of a concern now. CFOs expect the Bank of England to reduce interest rates by 75 basis points to four percent by year-end. Wage growth is slowing too, with CFOs ranking it as the highest external risk. At the same time, the U.S. stands out as the most attractive destination for investment, with UK CFOs rating it as highly appealing. In contrast, the UK’s attractiveness for investment has declined sharply over the past decade. Overall, while UK CFOs are managing a period of heightened uncertainty, they remain focused on managing costs, controlling risks, and responding cautiously to external economic pressures.
