Deloitte CFO Survey: UK finance leaders’ confidence drops as geopolitical risk dominates agenda
- Business optimism among UK CFOs has fallen to a six-year low;
- Geopolitics is cited as the top external risk, with levels of concern at a record high;
- Rising energy prices and worries over the prospect of higher interest rates make up the top three risks;
- Cost control and building up cash are at the top of the priority list for finance leaders.
Deloitte’s latest survey of UK Chief Financial Officers (CFOs), conducted between 16 and 30 March 2026, shows confidence among the UK’s largest businesses has fallen to a six-year low.
CFO confidence fell to a net -57%1, from -13% in the previous quarter, with concerns around energy prices, inflation and interest rates surging in the wake of the situation in the Middle East. As has been the case for the last three years, CFOs reported that geopolitical developments represent the greatest external risk2 to their businesses.
Ian Stewart, chief economist at Deloitte UK said: “The conflict in the Middle East is reshaping business sentiment: it’s created a shock to CFO confidence, lowering optimism to levels we haven’t seen since the early days of the COVID-19 pandemic. Finance leaders are coping with high levels of external uncertainty, and their focus is on managing risks from geopolitics, rising energy prices and higher financing costs.”
Consequences of adverse geopolitical developments
This quarter the survey repeated a set of questions asked at the same time last year, on how finance leaders see geopolitical risks impacting their own business.
When asked about the consequences of adverse geopolitical developments over the next three years, the top three concerns were energy costs (61%), inflation and interest rates (61%), and an increase in cyber-attacks (60%), rising from 44% last year.
Reducing costs and increasing cash flow remains top priority
CFOs have reacted to rising risk with a shift to more defensive financial strategies. Cost control and building up cash are at the top of the priority list3, while expectations for capital spending4 and hiring have flagged.
Ian Stewart commented: “Rarely in the last 16 years have UK CFOs been more focused on cost control than today. This challenging environment is prompting CFOs to scale back expectations for margins and sharpen their focus on cost reduction and cash conservation. The immediate priority for finance leaders is to strengthen balance sheets in the face of external headwinds.”
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Note to editors
1 A number of the Deloitte CFO survey findings are presented in terms of net balances – standard practice with surveys conducted by many central banks. In the case of optimism, CFOs were asked whether they were more or less optimistic about the financial prospects of their business compared to three months ago. The net balance (net -57%) was then computed by subtracting the percentage of CFOs who reported feeling less optimistic from those who reported feeling more optimistic. Net balances can be negative or positive. In the case of optimism, a negative reading implies a greater proportion of CFOs reported feeling less optimistic than reported feeling more optimistic. Throughout this press release and the survey report, net percentages indicate where net balances are used to present findings.
2 The 12 risk areas tracked in the survey are:
- Rising geopolitical risks worldwide including greater protectionism
- Poor productivity/weak competitiveness in the UK economy
- Higher energy prices or disruption to energy supplies
- Persistent labour shortages
- The risk of higher inflation and/or a bubble in housing and other real and financial assets
- The prospect of further rate rises and a general tightening of monetary conditions in the UK and US
- Long-term effects of climate change
- Economic weakness and/or volatility in US growth
- Medium-term supply chain disruption
- Deflation and economic weakness in the euro area, and the possibility of a renewed euro crisis
- Effects of Brexit/deterioration in UK-EU relations
- Weakness and/or volatility in emerging markets
Geopolitical developments represented the greatest external risk for CFOs, with a weighted average rating of 79 this quarter, compared to 65 in the previous quarter. Higher energy prices or disruption to energy supplies received a rating of 70 this quarter, compared to 47 in December. Worries over interest rate rises had a rating of 65, with last quarter at just 44.
3CFOs were asked to rate the priorities for their business in the next 12 months. Cost control ranked the highest, with 68% reporting it as a strong priority for the next 12 months – up from 51% in the last quarter. Cash control was the next priority for CFOs with 43% saying it was a key focus, up from 36% last quarter.
4A net 46% CFOs expect UK corporates to reduce capital expenditure, a net 72% expect a fall in discretionary spending and a net 79% expect a fall in hiring.
About the survey
Conducted between 16 and 30 March 2026, the Q1 2026 Survey is the 75th quarterly survey of Chief Financial Officers and Group Finance Directors of major companies in the UK.
Overall, 79 CFOs participated, including the CFOs of 12 FTSE 100 companies and 29 FTSE 250 companies. The rest were CFOs of other UK listed companies, large private companies and UK subsidiaries of major companies listed overseas.
The Deloitte CFO Survey is the only survey of major corporate users of capital that gauges attitudes to valuations, risk and financing.
For copies of previous CFO surveys, please see here.