CFOs cautiously optimistic about UK economy

Chief financial officers are uncertain about the future of the UK economy for the year ahead, according to a new poll.

Deloitte's CFO Survey found that a number of chief financial officers (CFOs) cite domestic politics and economic risks at an international are two of the main concerns.

When asked to give a rating – between 0 and 100 – of the risk attached to the upcoming General Election, deflation and weakness in the eurozone, participants to the study responded with 63 and 56 respectively.

In spite of this concern, Deloitte found that many CFOs are still positive about the UK earnings growth and business investment in 2015. The optimists still outnumber the pessimists.

"Rising levels of uncertainty have caused a weakening of corporate risk appetite which, nonetheless, remains well above the long-term average," said Ian Stewart, chief economist at Deloitte.

“Concerns about policy change after May’s General Election have risen significantly and this is seen as the biggest risk facing UK business in 2015.  Deflation and weakness in the euro area is a growing concern and is now the second greatest business risk, followed by a UK referendum on EU membership and by emerging market weakness."

The survey found that 71 per cent of CFOs believe that over the next two years, inflation will sit between 1.6 per cent and 2.5 per cent, which is in line with the forecasts made by the Bank of England.

Last year the International Monetary Fund predicted that the growth of the UK's economy will slow down to 2.7 per cent, down from 2014's 3.2 per cent.