U.K. Finance Chiefs' Optimism Drops to Lowest in 12 Months, Deloitte Says
Confidence among chief financial officers at major U.K. companies fell for a second quarter to a 12-month low on concern the economy will return to recession amid the government’s budget squeeze, a survey by Deloitte LLP found.
The balance of CFOs reporting greater optimism dropped to 24 percent from 40 percent in the previous quarter, London-based Deloitte Touche Tohmatsu said in an e-mailed statement today. Finance chiefs see a 38 percent chance of a double-dip recession, up from 33 percent in the first three months of 2010. Even so, sentiment about the availability of credit rose to its highest since Deloitte began its survey in 2007.
“The latest CFO survey paints a picture of concern about growth coupled with improvements in the corporate credit and liquidity environment,” Deloitte Chief Economist Ian Stewart said in the statement.
Prime Minister David Cameron’s government trimmed its economic growth forecast for 2010 to 1.2 percent in last month’s budget as it proposed spending cuts and tax increases totaling 113 billion pounds ($172 billion) to slash a record deficit. The government is demanding that state-owned banks boost credit to businesses.
Deloitte surveyed 125 CFOs, including 32 from companies in the benchmark FTSE 100 Index, between June 11 and June 25.