Survey of chief financial officers reveals drop in negative sentiment but leaving EU is still top concern

Fears about the effect of Brexit are receding among Britain’s company bosses – although the UK’s departure from the EU remains their top risk.

Nearly a third of chief financial officers said they are more optimistic about the prospects for their company than they were three months ago – the highest level since 2015 – a poll by advisory firm Deloitte has found.

However, 60% still believe the business environment will be worse when the UK leaves the EU, according to the survey of 130 CFOs from 91 FTSE 350 firms and other large private companies. This is a slight fall from 66% in the previous quarter.

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

As fears have diminished, appetite for risk has climbed, although it remains below long-term averages. Just over a quarter of CFOs told Deloitte they thought now was a good time to take risk on to their balance sheets, up from 21% in the latter part of last year and 8% after the referendum. This compares with 51% 12 months before the EU referendum.

“Crucially, two longstanding sources of risk – concerns about weakness in emerging markets and the euro area – have fallen significantly. The decline in concern about the euro area is the largest recorded for any risk factor, indicating growing confidence about Europe’s recovery,” Stewart said.

“A more stable environment has bolstered corporate risk appetite and a laser-like focus on cost control and building cash flow has softened, with more weight placed on capital spending and expansion.”

The survey was carried out in the fortnight up to 22 March, a week before the prime minister sent her letter to Brussels triggering a two-year countdown to Britain’s departure from the EU.