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Unexpected North/South divide among CFOs when it comes to being optimistic about financial prospects

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CFOs based in the South of Europe, including Ireland, Italy, Poland, Portugal and Spain are the most optimistic in the 15 countries surveyed by Deloitte. Each of these countries have seen upgrades to growth forecasts for both 2015 and 2016.

Optimism is weakest in northern economies, with only 14 per cent of CFOs in France and Norway saying they are optimistic, followed by Germany and the UK (both 18 per cent). 

Of the UK CFOs, 73 per cent believed their business faced a high level of financial and economic uncertainty from outside sources. This fall, the report suggested, was reflected by a renewed Greek debt crisis, fears over Chinese growth, equity market volatility and “a general dampening of global growth expectations.”

Risk appetite also declined, with 33 per cent of CFOs confirming that now is a good time to take risk onto their balance sheets, down from 38 per cent in Q1. Risk appetite is highest in Italy (56 per cent), followed by Ireland (48 per cent), the UK and Spain (both 47 per cent). Risk appetite is lowest in Norway and Germany, with both countries at 20 per cent saying now is a good time to take risks.

David Sproul, senior partner and chief executive of Deloitte UK, said: “Despite high levels of uncertainty among UK CFOs businesses here are among the most positive on risk appetite, hiring intentions and revenue growth. UK CFOs also have a stronger focus on growth than the majority of their continental colleagues for whom cost control is the main priority.”

Ian Stewart, chief economist at Deloitte UK said that for the UK CFOs, whose companies tended to be large with overseas exposure, “the big news over the last three months has been the deterioration in the outlook for emerging markets, and particularly Russia, Brazil and China.”

The survey was conducted before the terrorist attacks in Paris took place, but Stewart suggested that “although it’s a huge political event and terrible event, actually the economic effects are probably likely to be limited and transient.”

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