U.K. Finance Chiefs' Optimism Highest Since 2015, Deloitte Says

(Bloomberg) -- Optimism among U.K. chief financial officers climbed to an 18-month high in the weeks before Prime Minister Theresa May formalized Britain's intention to leave the European Union.

Almost one-third of CFOs said they are more optimistic about prospects for their company than they were three months ago, according to Deloitte's first-quarter survey. That's up from 3 percent immediately following the June Brexit vote. 

“CFOs believe the Brexit headwinds have eased and see far less damage to their spending plans than earlier expected,” said Ian Stewart, chief economist at Deloitte. “While most still see Brexit having an adverse effect on the business environment, even here the degree of negativity has fallen.”

While finance chiefs' risk appetite rose, it remains below long-term averages and is about half the level seen in the year preceding the referendum. Still, firms are increasingly moving away from the most defensive strategies such cost reduction in favor of expansionary measures like raising capital spending and introducing new products.

Brexit remained the top concern, with 60 percent of respondents saying the business environment will be worse when the U.K. leaves the EU. Around a quarter said the divorce will see their own capital spending decrease and 30 percent say it will cause them to slow hiring.

Deloitte surveyed 130 CFOs of FTSE 350 and other large private companies with a combined market capitalization of 376 billion pounds ($470 billion) from March 8 and March 22. May invoked Article 50 of the EU's Lisbon Treaty a week later, triggering the start of two years of formal talks to exit the world's largest trading bloc.

To contact the reporter on this story: Lucy Meakin in London at lmeakin1@bloomberg.net.

To contact the editors responsible for this story: Paul Gordon at pgordon6@bloomberg.net, Brian Swint, Andrew Atkinson