Record Levels of Concern Among UK Financial Leaders
Chief financial officers at Britain’s largest corporations are reporting the highest levels of concern about competitiveness and productivity in at least 11 years, according to a comprehensive survey conducted by professional services firm Deloitte. The findings, collected from 68 CFOs across major UK companies, reveal that these operational worries have now reached parity with longstanding geopolitical anxieties that have dominated corporate thinking in recent years.
The survey period from September 17 to September 30 captured sentiment during a particularly challenging economic period for businesses operating in the United Kingdom. With inflation running at double the Bank of England’s target and wage growth remaining elevated, financial leaders are implementing defensive strategies to protect their organizations’ financial health.
Economic Context: Inflation and Wage Pressures
The economic backdrop for these concerns remains challenging, with the Bank of England reporting inflation reached 4% in September – exactly double its official target and the highest rate among major advanced economies. Annual wage growth, while showing some moderation, continues to run at nearly 5%, significantly above pre-pandemic levels and creating sustained cost pressures for employers.
This economic environment has forced financial leaders to adopt conservative financial strategies. “CFOs have responded by strengthening balance sheets through a focus on cost control, building cash reserves, and reducing debt,” explained Ian Stewart, chief economist at Deloitte UK. This defensive posture reflects the uncertain outlook facing British businesses as they navigate multiple economic headwinds.
Geopolitical Concerns Ease Slightly Amid Trade Developments
While operational worries have increased, the survey did show some moderation in geopolitical concerns compared to earlier in 2025. This shift follows U.S. President Donald Trump’s negotiation of several bilateral trade agreements designed to mitigate the impact of his administration’s import tariffs. However, geopolitical risks remain elevated and continue to feature prominently in corporate risk assessments.
The balancing act between operational and geopolitical concerns highlights the complex environment facing UK businesses. As companies manage immediate cost pressures, they must also remain vigilant about broader international developments that could impact their operations and supply chains.
Tax Policy Uncertainty Looms Large
Although the Deloitte survey didn’t specifically address tax policies, other business surveys indicate this has become a significant concern for employers. Companies are particularly anxious about potential tax increases following last year’s rise in social security contributions implemented by Chancellor Rachel Reeves in her first budget.
With Reeves expected to announce further tax measures on November 26 as part of her strategy to improve public finances, businesses are bracing for additional fiscal pressures. This uncertainty is contributing to the cautious approach many CFOs are taking toward investment and expansion decisions.
Operating Cost Expectations Reach Multi-Year High
The survey revealed striking statistics about cost expectations, with a net 84% of finance leaders anticipating operating cost increases over the next 12 months. This represents the highest level of cost pessimism in more than four years and underscores the challenging environment facing UK businesses.
These cost pressures are affecting business decisions across multiple dimensions, from hiring practices to investment timing. A separate report from rival accounting firm BDO showed businesses delayed hiring in September due to rising costs and budget uncertainty, though corporate optimism saw a slight improvement based on stronger order books and hopes for U.S. investment.
Methodology and Survey Composition
Deloitte’s comprehensive survey was conducted between September 17 and September 30, 2025, capturing sentiment during a critical period ahead of the autumn budget announcement. The 68 participating CFOs represented a cross-section of UK business leadership, including 11 from FTSE 100 companies and 24 from FTSE 250 firms, with the remainder coming from British subsidiaries of large multinational corporations.
This diverse representation ensures the survey reflects concerns across the spectrum of UK business, from domestic champions to international corporations with significant UK operations. The findings provide valuable insights for policymakers and business leaders alike as they navigate current economic challenges.
Broader Business Implications and Strategic Responses
The record levels of concern about competitiveness come at a time when businesses are facing multiple challenges simultaneously. Beyond immediate cost pressures, companies are grappling with technological transformation, sustainability requirements, and evolving workforce expectations. These findings from authoritative business reporting highlight how UK businesses are adapting their strategies in response to these converging pressures.
Interestingly, while UK CFOs are expressing these concerns, other sectors are experiencing significant advancements. Recent developments in medical injection technology, space telescope software solutions, and environmental land management reforms demonstrate how innovation continues across different fields despite economic challenges.
The coming months will be critical for UK businesses as they respond to both the immediate budget announcements and longer-term structural challenges. The defensive financial strategies currently being implemented suggest companies are preparing for continued uncertainty while seeking to maintain their competitive positions in increasingly challenging market conditions.
