UK CFOs Look Sunny Ahead in 2024
According to Deloitte’s latest CFO survey, the big money‑heads at the top UK firms are feeling hopeful as 2024 rolls in.
Positive Buzz Builds for the 2nd Straight Quarter
The mood among finance chiefs has surged—11 % of CFOs are more upbeat about their company’s future than they were three months ago. This is the second quarter in a row that sentiment moves above the long‑term average.
Why the Optimism? Even While the Economy’s Breathing Harder
- In Q3, GDP went into reverse gear, and growth forecasts for 2024 look drab.
- But the economy’s actually holding its own better than expected: job numbers remain low, companies still coming out ahead, and markets stay calm.
- Since summer, inflation’s chillier, giving a nice boost to rate‑cut hopes.
Survey Snapshot
The survey ran between 28 Nov and 12 Dec 2023, featuring 72 CFOs—including leaders from 12 FTSE 100 and 26 FTSE 250 firms. Altogether, listed companies cover a market value of £328 bn—about 13 % of the UK equity market.
Takeaway
Even when headline numbers warn of a slowdown, CFOs are riding a wave of confidence—flexible, optimistic, and ready for whatever 2024 brings.
Inflation worries and interest rate expectations ease
The Big Picture
CFOs have been keeping a close eye on inflation and interest rates for the past couple of years. The latest survey shows that those worries have started to loosen their grip.
Key Metric:
Why the Change?
What CFOs See Ahead
| What CFOs Expect | Details |
|---|---|
| Inflation & wages | Expected to get softer over the next 24 months |
| Bank of England’s rate | Projected to fall from 5.25% today to about 4.75% in a year |
Bottom Line
CFOs breathe a little easier: the inflation storm appears to be rolling off, and the interest rate roller coaster is leaning toward a calmer ride. The future looks a bit lighter—and hopefully, a bit less weighty—on those finance leaders.
Geopolitical factors again rated biggest risk
CFOs Get Geopolitics on Their Springboards
In the latest pulse‑check, chief financial officers (CFOs) are once again eyeing geopolitical turbulence as the top external threat looming over their companies in the next year.
Why Geopolitics? The Numbers Speak
- Geopolitical risk score: 63 (up from 59 in the last survey)
- UK economy worry: 56 (jumped from 53)
- Energy price shock: 54 – still lower than the highs seen last summer
- Euro‑area sentiment: 42 – a notable rise from 34
All told, almost half of CFOs (about 44%) are planning to diversify their supply chains and get closer to home to weather the storms.
Key Takeaways
- Geopolitical pressures are climbing the risk ladder. CFOs are all set to spread risk and keep the wheels turning.
- The UK’s own economic mood now ranks as the second biggest headache for these finance gurus.
- Even with the energy price concern stirring the pot, the anxiety isn’t as high as at the end of last year.
- The euro area feels a fresh bump in the risk curve, showing the simmering tensions beyond the UK.
Bottom line? CFOs are sharpening their strategies, bracing for complex global currents, and looking to keep their firms anchored – all while juggling their own trepidations about productivity and competitiveness.
Anticipated higher labour costs, but more investment in technology
Decoding the CFOs’ Forecast: Work, Tech, and Taxes in 2025
Labour Costs: The New Beige Dress of the Economy
Sound the alarm—92 % of CFOs say wages will stay high for the longer haul. 2023 was just the appetizer; the main course is a stickier salary menu that’s set to keep on serving.
New Tech—Booyah, We’re Billin’ It!
Long‑term tech budgets are on the rise, with a 63 % net bump in investment expectations. CFOs are basically saying, “Bring on the robots, drones, and AI; it’s time to upgrade our digital playground.”
State Play: Taxes & Rules, Oh Yeah!
The CFOs think big‑screen governance is coming, with a 39 % net uptick in anticipated taxes and a 42 % net climb in regulation.
Where Are We Heading? The Remote‑Work Countdown
Home‑office vibes are peaking—57 % of finance comets anticipate a long‑term dip in flexible or home working. “Back to the office, folks!” the CFOs seem to be chanting.
- Labour costs: ↑ long‑term.
- Tech spending: ↑ future‑firm.
- State involvement (taxes, regulations): ↑ steady.
- Remote work: ↓ in the long run.
Defensive strategies dominate
CFOs Tighten Their Shiploads of Cash Amid Uncertainty
At the start of 2024, boardroom chatter is surprisingly upbeat—but the big finance heads are still playing it safe. A fresh survey shows that cost cutting is the top knock‑on priority, with 51 % of CFOs saying they’re geared to slash spending over the next year.
What’s next on the tick‑list?
- Cash flow boost – 47 % see a steady inflow as a strong focus.
- Growth moves – a sharp drop to just 15 % means new products or market push is on the back burner.
“CFOs are kicking off 2024 on a positive note, but there’s a lingering cloud of uncertainty: geopolitics, weak UK productivity, and a future where growth feels distant,” explains the analyst.
Large corporates, it turns out, have a bit of a cushion. They can dip into the lending market—though rates are up, scale gives them a leg up. Smaller firms, on the other hand, seem more exposed to the tightening credit squeeze.
Bottom line
For now, the strategy is a classic “cut, save, and keep the coffers full” playbook. Hiring, capital spend and even M&A are on hold, while companies dig deeper into dividend‑friendly cash piles.
