Internet confidence amongst CFOs plunged to -57% within the second half of March 2026, a dramatic drop from -13% within the earlier quarter.
Rachel Reeves, Chancellor of the Exchequer (Picture: Getty)
Enterprise confidence has fallen to its weakest degree because the early days of the COVID-19 pandemic, Deloitte’s newest quarterly survey of UK chief monetary officers has proven. Internet confidence amongst CFOs plunged to -57% within the second half of March 2026, a dramatic drop from -13% within the earlier quarter and the bottom studying in six years, delivering a dramatic blow to Chancellor Rachel Reeves.
The survey, carried out between March 16 and 30, highlights how the battle within the Center East has reshaped company sentiment virtually in a single day. Ian Stewart, chief economist at Deloitte UK, stated: “The battle within the Center East is reshaping enterprise sentiment: it’s created a shock to CFO confidence, reducing optimism to ranges we have not seen because the early days of the COVID-19 pandemic.
Smoke rises above Lebanon after an Israeli airstrike (Picture: Getty)
“Finance leaders are dealing with excessive ranges of exterior uncertainty, and their focus is on managing dangers from geopolitics, rising vitality costs and better financing prices.”
Geopolitical developments stay the only best exterior danger to UK companies for the third consecutive yr. This quarter they acquired a weighted common danger score of 79, up sharply from 65 within the earlier survey.
Greater vitality costs or disruption to provides jumped to a score of 70 (from 47), whereas worries over additional rate of interest rises rose to 65 (from 44).
When requested concerning the penalties of opposed geopolitical developments over the subsequent three years, CFOs’ high issues had been rising vitality prices (61%), inflation and rates of interest (61%), and a rise in cyber-attacks (60% — up from 44% a yr earlier).
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In response, Britain’s largest firms are shifting swiftly into cost-cutting mode. Value management has develop into the overriding precedence, with 68% of CFOs score it a “robust precedence” for the subsequent 12 months — up from 51% final quarter. Money conservation additionally rose in significance, cited by 43% (up from 36%).
Mr Stewart added: “Hardly ever within the final 16 years have UK CFOs been extra targeted on value management than as we speak. This difficult atmosphere is prompting CFOs to reduce expectations for margins and sharpen their concentrate on value discount and money conservation. The quick precedence for finance leaders is to strengthen stability sheets within the face of exterior headwinds.”
Expectations for spending and hiring have deteriorated markedly. A internet 46% of CFOs anticipate a discount in capital expenditure, a internet 72% count on a fall in discretionary spending, and a internet 79% forecast decrease hiring over the subsequent yr — the best such studying because the second quarter of 2020 and up from 55% on the finish of 2025.
The survey additionally confirmed firms’ expectations for inflation in a yr’s time rising to three.6%, the best degree because the third quarter of 2023. Some 61% of CFOs stated they had been “considerably involved” about rising vitality costs and inflation feeding by to larger rates of interest.
The sharp deterioration comes at a troublesome second for Ms Reeves, with separate S&P World enterprise surveys additionally exhibiting private-sector development slowing to a close to standstill in March amid quickly rising value pressures and better public inflation expectations.
Nonetheless, the labour market image stays blended. A separate survey from the Recruitment and Employment Confederation (REC) indicated that whereas hiring confronted a headwind from the Gulf battle in March, the general pattern of stabilisation seen to date in 2026 continued.
Neil Carberry, REC Chief Government, stated: “The Gulf battle supplied a headwind to hiring in March, however this didn’t cease the pattern of stabilisation that has outlined 2026 to date.”
The Q1 2026 Deloitte CFO Survey is the seventy fifth quarterly version. It polled 79 CFOs and Group Finance Administrators from main UK firms, together with 12 from FTSE 100 companies and 29 from FTSE 250 firms.
The rest got here from different UK-listed companies, giant non-public firms and British subsidiaries of main overseas-listed multinationals. The Deloitte CFO Survey is the one common survey targeted solely on main company customers of capital, monitoring attitudes to valuations, danger and financing.
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