UK’s finance chiefs rally behind the vote to keep Britain in the EU, as uncertainty curbs appetite for risk
The majority of the UK's finance chiefs are so nervous of a vote for a Brexit this summer that it's stopping them from taking on other risks, a report out today has found.
According to the survey by Deloitte of over 100 finance chiefs, three out of four (75 per cent) are now in favour of Britain staying in the EU from a business standpoint, up from 62 per cent when the same question was asked by the professional services firm three months ago, while they also rank this summer's referendum as the biggest risk firms face at the moment.
Speaking to Morning Wire, Ian Stewart, chief economist at Deloitte, pointed out that the announcement of the date for the referendum could have acted as a "catalyst for people to think more about it".
When asked how they thought EU membership aided British companies, nearly nine out of ten (89 per cent) said it bolstered the UK's exports performance, while 87 per cent said it helped forge better connections with other European nations and 86 per cent said the EU status was beneficial in securing foreign direct investment.
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However, the number of finance heads that feel British business could benefit from a Brexit has also inched up to eight per cent, an increase from six per cent three months ago.
The degree of doubt caused by the EU referendum is already being felt in many finance departments across the country, with 83 per cent of finance chiefs ranking the level of uncertainty facing their business as above normal, high or very high, up from 64 per cent when the question was asked in last quarter's survey.
These feelings of uneasiness persisted despite perception of risk in areas other than the EU referendum , such as a potential interest rate rise and volatility in the emerging markets, tapering off.
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"We are already seeing the unsettling effect of the referendum on business sentiment," said David Sproul, senior partner and chief executive of Deloitte. "Our survey shows declining risk appetite among finance chiefs, with the referendum rated as the top risk their business faces, and we have seen a marked slowdown in M&A activity as businesses put plans on hold for now."
Despite this, more than half (53 per cent) of the finance chief questioned were yet to start making contingency plans for a possible British exit.
Stewart remarked that, given the reactions from businesses he had seen in the run up to the Scottish referendum, "often, in a world where there are lots of things that could happen, it's often the case drawing up plans to cope with things comes as you get closer to the event".