Deloitte CFO survey flags positive new year

Posted: 08/01/2024

The chief finance officers of the UK’s largest firms are optimistic about prospects for their businesses as they enter 2024, according to Deloitte’s latest CFO survey.

Sentiment among finance leaders has risen for the second consecutive quarter – to well above average levels – with a net 11% of CFOs more optimistic about the financial prospects of their business than they were three months ago, says the report.
Conducted between 28 November and 12 December 2023, 72 CFOs participated in this quarter’s survey, including the CFOs of 12 FTSE 100 and 26 FTSE 250 companies. The combined market value of the 35 UK-listed companies surveyed is £328bn, or approximately 13% of the UK quoted equity market.  
Inflation worries and interest rate expectations ease
The inflation and rate worries that dominated the CFO Survey for much of the past two years have eased since the last quarter. 

The risk of higher inflation has dropped down CFOs’ list of concerns to a weighted average rating of 53, from 58 in the last survey.

This shows the threat of persistently high inflation and the prospect of further interest rate rises has weakened, consistent with price pressures easing faster than expected in recent months.
Finance leaders expect price and wage pressures to soften over the next two years. They see the Bank of England’s base rate falling from its current level of 5.25% to 4.75% in a year’s time.

Geopolitical factors again rated biggest risk
CFOs see geopolitical factors as the greatest external risk to their own businesses over the next 12 months, with a weighted average rating of 63, up from 59 in the previous survey. 

Reflecting on the risk that this poses to their businesses, a net 44% of CFOs expect greater diversification and near-shoring of supply chains in the longer term.
There is also increased anxiety about productivity and competitiveness in the UK economy, which is now second on the risk list with a rating of 56, up from 53 last quarter.
Higher energy prices, or disruption to supply, is seen as the third biggest risk (at 54), but the rating remains well below the levels seen in the second half of last year.

Notably, there is a marked deterioration in sentiment around the euro area, with an increased risk rating of 42, up from 34 in the last survey.
Anticipated higher labour costs, but more investment in technology
There is a strong consensus among finance leaders that the UK has entered a prolonged period of high labour costs.

A net 92% of CFOs expect labour costs to remain elevated in the long term, relative to 2023. But CFOs are decidedly bullish on investment in new technology, with a net 63% of CFOs expecting investment in new technology to increase in the long term.
Finance chiefs also anticipate a greater role for the state in the economy, with significant proportions expecting an increase in levels of taxation (net 39%) and regulation (net 42%).
By contrast, CFOs think that levels of flexible or home working have peaked, with a net 57% expecting home working to decline in the long term.
Defensive strategies dominate
CFOs’ balance sheet strategies remain largely defensive. Cost reduction is their top priority, with 51% of CFOs rated reducing costs as a strong priority for their business over the next 12 months. 

Increasing cashflow follows, with 47% of CFOs rating it as a strong priority. A sharp fall in the priority assigned to introducing new products and services or entering new markets (only 15% of CFOs say it’s a strong priority now) has driven expansionary strategies further out of favour.
• For copies of previous CFO surveys, please visit  

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