UK firms to cut costs and hiring in next 12 months

Prolonged political uncertainty in Britain is forcing finance directors to cut costs and hold off hiring to help companies prepare for an unpredictable year ahead, according to a survey by Deloitte.

The audit of 91 chief financial officers of some of Britain’s largest companies showed that a renewed focus on cost control will be a strong priority for six in 10 of respondents over the next year, the highest level for 10 years.

According to seven in 10 of the CFOs, hiring will reduce in the next 12 months, while almost half will focus on trying to increase cash flow.

Britain’s economy has been buffeted by Brexit. Output shrank in the second quarter when businesses found themselves holding unnecessary stock that had built up before the original leaving date.

The Deloitte report said the resulting uncertainty was now entrenched while domestic economic factors such as weak productivity and competitiveness are a growing concern.

With weak demand in Britain becoming the second biggest risk facing companies, expectations of an interest rate cut are also growing.

Via Reuters