UK firms' risk appetite picks up even as election looms: Deloitte

Sun Sep 28, 2014 7:05pm EDT
 
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LONDON (Reuters) - British companies are feeling their most confident about taking on business risk in seven years despite worries about an election in 2015 and a possible referendum on Britain's membership of the European Union, a survey showed on Monday.

In a change of mood likely to be welcomed by the Bank of England, 72 percent of chief financial officers said now was a good time to take risk onto their balance sheets, according to the quarterly survey by accountants Deloitte.

That was up from 65 percent in the previous survey conducted in the second quarter.

"With a resurgent U.S. economy, good growth in the UK and plentiful liquidity, CFOs have shrugged off the effects of rising uncertainty and weakness in Europe," said Ian Stewart, chief economist at Deloitte.

"But it's not all plain sailing for the corporate sector."

Perceptions of economic and financial uncertainty rose for the first time in two years, in large part due to Scotland's independence referendum on Sept. 18 which threatened to break up the United Kingdom but eventually resulted in a 'no' vote.

The survey was conducted from Sept. 8 to 22.

The CFOs ranked the 2015 election and a future UK referendum on EU membership ahead of deflation, weakness in the euro zone and higher interest rates as risks to their businesses.

"Political risk has eclipsed worries about the economy as concerns for CFOs," Stewart said.   Continued...