Monday 14 October 2019 1:00 am

CFOs prioritise cost-cutting as uncertainty bites

Finance chiefs are tightening their belts in an effort to weather the mounting storm of economic uncertainty.

More than half of the UK’s most senior chief financial officers (CFO) are focusing on cost-control as a strong priority, marking the highest level since the end of the financial crash.

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According to a new report from big four accountancy firm Deloitte, 58 per cent of CFOs say cost reduction is one of their main issues, while almost two-thirds say their business faces high or very high levels of financial and economic uncertainty.

The survey, which included responses from 59 FTSE CFOs with a combined market value of £468bn, found that just seven per cent of respondents thought it was a good time to take risk onto their balance sheets.

“Perceptions of uncertainty are elevated and corporate risk appetite is vanishingly low,” said Ian Stewart, chief economist at Deloitte.

He added: “The priority appears to be curbing costs, not expansion.”

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While the effects of Brexit continue to be the largest risk facing businesses – up marginally from 65 to 66 (on a scale of 0 to 100) – domestic economic conditions are weighing heavier on CFOs’ minds.

Weak demand in the UK is the second biggest risk, up from a risk rating of 54 in the second quarter to 62 in quarter three, hitting the highest level in five years.

Poor productivity and weak competitiveness in the UK also rose from 46 to 53 in the same period.