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CFOs concerned about growth in 2015

The survey paints a picture of the risks and opportunities confronting major UK corporates in 2015, and reveals that many businesses will be seeking growth in an uncertain world.

The good news is that CFOs think UK economic fundamentals are pretty sound,” said Ian Stewart, chief economist at Deloitte. CFOs believe that the long squeeze on the UK consumer is over and expect real wages to rise in 2015 for the first time in six years.

They are bullish about prospects for investment and expect to increase UK capex in their own businesses by nine per cent in 2015, following growth of about eight per cent in 2014.

And, unlike policymakers, they do not think the UK has a productivity problem. In fact, they rate UK economic risks incredibly low down the list of things to worry about.

However, Stewart suggests that despite the good news regarding wages, investment and confidence in UK prospects, this is tempered by worries about external risks and domestic politics.

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With the slowdown in emerging markets, euro-stagnation and the drop in the oil price contributing to a weakening in CFO risk appetite and business confidence,” it’s no wonder that CFOs seem unsure about what lies ahead.

Unsecured borrowing rose by 1.25bn in the UK in November and research by the OECD suggests that income inequality now has a negative impact on economic growth and may have knocked nine points off Britain’s growth between 1990 and 2010.

And although still well above the average, Stewart explains that 56 per cent of CFOs say now is a good time to take risk onto their balance sheets, down from a record reading of 71 per cent in the third quarter.

The big issue is whether the UK will be able to shrug off the effects of such uncertainties this year, or, as in 2012, during the euro crisis, weakness overseas will drag down UK growth. The UK economy has greater momentum today than in 2012.

If you know an outstanding FD (or are one yourself!) that is making growth prospects happen this year despite such concerns, the why not nominate them for our FDs’ Excellence Awards.

Created in 2004, the FDs’ Excellence Awards, held in associations with ICAEW and supported by the CBI, are the most important national programme to recognise UK finance directors and controllers, and has honoured a host of extraordinary FDs.

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