UK business optimism at record low post-Brexit
Business optimism among finance chiefs has plunged to its lowest level on record in the wake of Britain's decision to quit the European Union.
A survey by consultancy giant Deloitte shows that 73pc of chief financial officers are less optimistic about the prospects for their company following the referendum result, up from 32pc in the first quarter.
The figure is the highest level registered since Deloitte's survey began in 2007 and higher than during the collapse of Lehman Brothers in 2008.
As a result, business bosses will put the brakes on hiring and rein in capital spending in the expectation that revenues will plummet.
David Sproul, senior partner and chief executive of Deloitte, said: "The outcome of the EU referendum has triggered a sharp, negative response from the corporate sector.
"This survey was conducted immediately after the referendum, against a backdrop of historical political upheaval and financial uncertainty.
"The faster-than-expected appointment of a new Prime Minister removes one source of uncertainty, now the government must set out its vision for the UK's future relationship with the EU to provide further stability and reassurance."
The survey also revealed that 83pc of CFOs expect a slowdown in hiring over the next year, the highest number recorded and up significantly from 29pc in the first quarter. The proportion forecasting a cut in discretionary spending (82pc) is the highest since 2011.
To counter the negative effects of the referendum result, 91pc of CFOs are urging the UK government to send a "strong signal" about its aims in negotiations with the EU.
A total of 88pc also said that maintaining the solvency and liquidity of the banking system is "essential", while 25pc want the government to continue with a deficit reduction plan.
Around 95pc of CFOs say the level of uncertainty facing their business is above normal, high or very high, up from 83pc in the first quarter and returning to levels last seen during the euro crisis in 2012.
Ian Stewart, chief economist at Deloitte, said: "CFOs do not seem to be waiting for growth to slow before adjusting direction. There has been a marked shift to more defensive balance sheet strategies in the wake of the referendum, with a focus on reducing costs, building up cash flow and caution on all forms of spending.
"Corporate willingness to take risk has seen one its largest ever declines while the outlook for capital spending, hiring and discretionary spending is at levels last seen just before the so-called 'double-dip' slowdown of 2012."
A total of 132 CFOs of FTSE 350 and other large private companies, worth over £365bn, participated in the survey.