CFOs see costs rising at the fastest rate in over four years - London Business News | Londonlovesbusiness.com

"The focus for CFOs has shifted, with geopolitical anxieties, a dominant concern for some time, moderating in the wake of a series of US trade deals. Domestic challenges have moved centre stage, with costs rising and mounting concerns about UK competitiveness. CFOs have responded by strengthening balance sheets through a focus on cost control, building cash reserves, and reducing debt."

"Geopolitics has rated as a top concern for CFOs in all but two quarters since the invasion of Ukraine. However, CFOs now attach a slightly lower risk rating to geopolitics, with an average score of 62, down from 71 in the previous quarter. Meanwhile concerns about UK productivity and competitiveness have risen to the highest level since Deloitte began asking this question in 2014"

"A net 47% of CFOs expect to see a fall in operating margins over the coming 12 months, the highest reading since Q2 2023 where it was 57%. CFOs report a slight acceleration in wage growth, with average wages at their own businesses rising 3.5% over the past 12 months. Finance leaders also expect inflation to stand at 3.2% in a year's time, an increase from their average expectation at this time last year, which was 2.4%."

Between 17 and 30 September, UK chief financial officers reported that a net 84% expect operating costs to rise over the next 12 months. Concern about UK productivity and competitiveness reached its highest level since 2014 and now matches geopolitics with a weighted risk rating of 62. Geopolitical risk rating eased to 62 from 71 in the previous quarter. Finance leaders are prioritising cost control, cash preservation and debt reduction to strengthen balance sheets. A net 47% expect operating margins to fall in the coming year. Average wages at respondent businesses rose 3.5% over the past 12 months, and inflation is expected to be 3.2% in a year.

Read at London Business News | Londonlovesbusiness.com