LONDON — Just 19% of chief financial officers of leading UK companies think the business environment will be better off after Brexit, according to a report by Deloitte.
A survey of 130 CFOs of FTSE 350 companies found that 60% believe the business environment will be worse once the two-year Article 50 negotiations end in 2019 and the UK formally leaves the European Union.
Despite the grim prognosis, this is down from 66% in the previous quarter.
Brexit remains the biggest risk for CFOs but optimism is on the rise compared to the last quarter of 2016.
On a risk scale of 0-100 they rated Brexit as 55, down from 62 last quarter.
Just under a third of CFOs said they are more optimistic about prospects for their company than they were three months ago, up from 27% in the previous survey and just 3% immediately after the referendum. That is the highest level since the second quarter of 2015, when 35% were more optimistic, according to Deloitte.
A measure of certainty is also beginning to return the market, after Prime Minister Theresa May outlined her Brexit negotiation strategy and triggered Article 50 of the Lisbon Treaty last month. Deloitte said 34% reported high or very high levels of uncertainty facing their business, down from 50% last quarter.
David Sproul, senior partner and chief executive at Deloitte, said: “The UK’s exit from the EU is a long and uncertain process and business sentiment is changeable.”
“But it is clear from this survey that the UK corporate sector enters the negotiation phase of Brexit in far better spirits than seemed likely in the months after last year’s referendum vote,” Sproul said.
“For many businesses, including our own, access to skills is one of the most pressing issues they face,” he said. “I believe mobility of people should be as high a priority as trade in the future negotiations. If we are to maintain the UK’s status as an open and thriving economy we must retain the diversity of skills that has helped our nation flourish.”
Prime Minister Theresa May has signalled she intends to take the UK out of the 28-nation single market trading bloc, potentially forfeiting the financial passport and putting an end to EU freedom of movement.