EU referendum: CFOs at UK firms want Britain to remain in Europe, survey shows

Chief financial officers (CFOs) of the UK's largest companies are increasingly in favour of Britain remaining part of the European Union, research released by financial firm Deloitte on Monday (4 April) showed.

According to Deloitte's latest CFO Survey, the business environment has become more challenging, leading risk appetite to hit a three-year low, while CFO perceptions of uncertainty have increased sharply. As a result, defensive strategies have become the main focus in the industry, while plans for hiring and capital spending have declined.

Of the 120 CFOs of FTSE 350 and other large private companies that participated in the survey, 75% said they were in favour of Britain remaining part of the European Union, compared with 62% in the final three months of 2015 and 74% in the second quarter of last year.

The number of CFOs who thought a Brexit would be beneficial to British businesses was also on the increase, rising to 8% in the first quarter of 2016 compared with 6% in the previous three months and 2% in the second quarter of 2015.

Over the last couple of months, the uncertainty surrounding the outcome of the referendum has been blamed for a series of disappointing economic data, and the survey showed uncertainty was on the rise. Some 17% of the respondents admitted they were uncertain of their position or were not prepared to disclose it, a sharp increase from the 4% recorded in the last three months of 2015.

Some 83% of CFOs said the level of uncertainty facing their business is above normal, high or very high, up from 64% in three months ago and the highest level since the fourth quarter of 2012.

Since the government announced the referendum will be held on 23 June a number of influential figures, from the political and business scene, have been eager to support one of the two campaigns by highlighting the advantages remaining in the EU would have over leaving the 28-country bloc and vice versa.

Of the CFOs who took part in Deloitte's survey, 89% said membership of the EU has helped UK export performance and 86% indicated it has attracted foreign direct investment. Meanwhile, 71% said being part of the EU has contributed to the success of UK financial services and 68% pointed to stronger UK's influence and connections with the rest of the world as the main positive.

"These results show a high level of support among Chief Financial Officers for the UK remaining a member of the European Union," said David Sproul, senior partner and chief executive of Deloitte.

"CFOs see significant benefits in UK membership, particularly in terms of helping UK exports, attracting investment and strengthening the UK's influence and connections with the wider world.

Meanwhile, the percentage of CFOs believing the UK benefits from the free movement of people fell from 87% in the second quarter of 2015 to 78%.

The EU referendum was ranked as the biggest risk businesses face, with 26% of respondents saying their company has made, or is in the process of making, contingency plans for a possible British exit of the EU. However, 53% have made no such plans.

"We are already seeing the unsettling effect of the referendum on business sentiment," added Sproul.

"While voices on both sides of the debate argue about the potential economic impact of a 'leave' vote, the referendum appears to already be contributing to a slowdown."