Surging Confidence: UK CFOs Embrace Growth Opportunities Post-Election

The latest Deloitte survey reveals a remarkable shift in sentiment among chief financial officers (CFOs) of some of the largest UK companies. Following the recent general election, CFOs have expressed heightened optimism about the financial prospects of their businesses, with uncertainty levels plummeting to an eight-year low.

Unlocking Growth and Driving Productivity: UK Businesses Poised for Expansion

Renewed Confidence and Risk Appetite

The survey findings indicate a significant surge in CFOs' confidence and risk appetite. Sentiment among CFOs has risen for the fourth consecutive quarter, with a net 23% being more positive about the financial prospects of their businesses compared to three months ago. This newfound optimism is attributed to the new government's focus on growth and stability, which has already started to increase corporate confidence.Finance leaders have entered the second half of the year in a confident mood, with expectations for revenue growth rising sharply. A net 64% of CFOs expect UK corporate revenues to increase over the next year, up from just a net 42% three months ago. This positive outlook is further bolstered by the perception of a more predictable business environment, as the worries around Brexit, COVID-19, inflation, and politics that have weighed on corporate sentiment for much of the last eight years appear to be clearing.

Embracing Risk and Unlocking Growth

The survey also reveals a significant shift in corporate risk appetite, with 36% of CFOs reporting that now is a good time to take greater risk onto their balance sheets. This represents the biggest rise in risk appetite in over four years, indicating that businesses are gearing up for growth.Finance chiefs are committed to driving growth, with industrial strategy being chosen as the top economic priority for the newly elected government. This aligns with the clear desire among business leaders to work in partnership with the government to unlock growth and drive productivity, which will be critical to delivering an inclusive and sustainable future for the UK.

Improving Credit Conditions and Geopolitical Concerns

The survey also found that finance chiefs have reported an improvement in credit conditions, rating credit as being more available than at any time in the last two years. This suggests that the corporate sector is well-positioned to access the necessary funding to support their growth ambitions.However, one persistent challenge remains for CFOs – geopolitics. This has been selected as the top risk to business and has received its highest rating since Russia invaded Ukraine. Despite the overall positive sentiment, the impact of global political tensions continues to weigh on the minds of finance leaders.

Muted Impact of the Election

When asked about the impact of the election on their business, the majority of CFOs (69%) believe the election would have little or no impact on their plans. Only a net 21% of CFOs felt that the election would have a mildly positive effect on their business.This suggests that while the new government's focus on growth and stability has boosted corporate confidence, the CFOs surveyed do not anticipate a significant direct impact on their day-to-day operations or strategic decision-making. The focus appears to be on leveraging the improved business environment to drive growth and productivity, rather than relying on specific policy changes.