UK bosses much more optimistic about 2024 than last year, PwC survey suggests

Bosses of UK firms are significantly more optimistic about the prospects for the UK economy in 2024 than they were a year ago, according to a new survey. 

PwC’s annual global CEO survey showed that 39 per cent of UK bosses expect the economy to improve in 2024, up from just nine per cent last year. 

Confidence in the domestic economy likely reflects easing inflation, rising real incomes and an expectation that the Bank of England will soon start cutting interest rates. 

“Confidence breeds confidence when it comes to the economy, so it’s encouraging to see UK business leaders feeling more optimistic about the UK’s prospects than last year,” Kevin Ellis, senior partner at PwC UK said.

Improving confidence in the economy was reflected in mooted M&A activity. Over half of surveyed CEOs expect to make at least one major acquisition in the next three years, the survey showed.

This was significantly higher than the previous three years when just a quarter of firms had made a big acquisition. M&A activity has been hit hard by higher interest rates and economic uncertainty, falling to a post-financial crisis low in 2023.

The report, which surveyed over 4,700 CEOs in 105 countries, found that the UK remained the top investment target for American CEOs, with nearly a third (32 per cent) ranking it number one destination.

The UK also leapt ten places to rank as the sixth most important target for Chinese CEOs.

A separate survey from KPMG showed that a majority of European and UK Equity Capital Markets (ECM) leaders still see London as an attractive listing destination, despite the dearth of IPOs last year.

94 per cent of surveyed ECM leaders said they would consider listing in New York, followed by London on 86 per cent. Just half selected Amsterdam.

Aadam Brown, head of independent equity capital markets advisory at KPMG UK, said “London has not lost its lustre…(it) is still considered a key destination of choice for large international companies”.

PwC’s survey also showed that the UK is outpacing its global counterparts when it comes to AI adoption.

42 per cent of UK CEOs have adopted generative AI in the past year, surpassing peers in the US, China, France and German bosses. 

Only Japan, Norway and Finland are ahead of the UK in adoption rates, according to PwC’s study. 

Ellis said generative AI presents a “move or lose” moment, which offers “huge benefits” for efficiency, competitiveness and profitability.

“The UK’s service-based economy makes it ideally placed for the GenAI revolution – building tech is only half the battle, ensuring people and businesses can use it is key,” he added.

While AI has prompted concerns about job cuts, the study reveals that nearly half of UK bosses plan to expand their workforce by five per cent or more in 2024, with only one-fifth planning to axe roles.