Economic uncertainty and worries about the
recession in the UK are the main factors eroding senior executives’
confidence in business performance, the latest Deloitte CFO survey

Deloitte’s Q2 CFO Survey, in which
finance directors and CFOs from major FTSE 100 and FTSE companies
were interviewed in order to gauge their sentiments toward risk and
financing, shows as much as 80% of CFOs feel there is not a good
time to take risk onto their balance sheet, marking the sharpest
decline in corporate confidence since the survey was launched in

 UK senior executives have also
expressed concerns about the crisis in the Eurozone. According to
Deloitte, CFOs see a 36% probability of one or more countries
leaving the euro by the end of 2012, an increase of 10 points
compared to the last quarter.

“Uncertainty has had a corrosive effect on
risk appetite. Last quarter’s CFO Survey highlighted a paradox-
despite a strong rise in business confidence, CFOs were pursuing
defensive sheet strategies. Events in the last three months seem to
have vindicated their underlying caution,” Deloitte chief economist
Ian Stewad said.

Head of Deloitte’s CFO programme Mark
FitzPatrick said corporates are reacting by cutting costs and
bolstering cash flow.

“They are less likely to be making
acquisitions or undertaking capital expenditure. On balance, CFOs
see hiring, capital spending and discretionary spending declining
over the next year,” FitzPatrick added.