`Brexit' Concerns Lead Risk List for U.K. CFOsby
Deloitte survey shows 75% favor staying in EU vs 62% in 4Q
`Brexit' risk rated above EU weakness, slowing U.K. demand
Chief financial officers of British companies say “Brexit” is the biggest risk their businesses face, above economic weakness in the euro area and slowing demand in the U.K., according to a Deloitte survey.
Seventy-five percent of the 120 CFOs polled said it would be favorable for the U.K. to remain in the European Union, an increase from 62 percent in the fourth quarter of last year. Only 8 percent said they favored leaving the EU.
“CFOs see significant benefits in U.K. membership, particularly in terms of helping U.K. exports, attracting investment and strengthening the U.K.’s influence and connections with the wider world,” said David Sproul, chief executive officer of Deloitte.
More than 80 percent of the respondents cited improved U.K. export performance and higher foreign direct investment inflows as benefits of EU membership, while only 15 percent named its legal, regulatory and compliance framework as a benefit.
The U.K. will hold a referendum June 23 on its membership in the EU. Most opinion polls show the outcome is too close to call.
The looming vote has damped risk appetite, according to the report, with fewer CFOs saying they think it’s a good time to take greater risks or sell shares.
“Corporates are pulling in their horns, with expectations for hiring and capital spending at three-year lows,” said Ian Stewart, Deloitte’s chief economist.