The CFO Survey is firmly established with media and policy makers as an authoritative barometer of UK corporates’ sentiment and strategies. It is the only survey of major UK corporate users of capital that gauges attitudes to valuations, risk and financing. To read the full report, visit www.deloitte.co.uk/cfosurvey

1. Uncertainty over post‑election policy change represents
the greatest threat to UK business according to the Chief
Financial Officers of the UK’s largest companies. CFOs
rank a referendum on EU membership as the second
greatest risk facing their businesses, followed by concerns
over weakness and political instability in the euro area.
Risk appetite appears to have decoupled from its
usual drivers, the economic outlook and equity market
performance. Sentiment about growth in the US, UK
and the euro area has improved since the previous CFO
Survey in December. And the FTSE100 rose by 14%
between mid‑December and late March to reach an
all‑time high.
Yet political worries and the threat of a renewed euro
crisis seem to have offset the impact of generally good
economic news and buoyant equity markets, dragging
down corporate risk appetite to a two-year low.
CFO expectations for investment spending
have also dipped.
Last September, as CFO risk appetite reached its
peak, a majority of CFOs rated government policy as
being appropriate across ten separate areas.
The highest levels of satisfaction, with scores of 90%
or more, went to monetary policy, the labour market
and taxation. On average 77% of CFOs rated policy as
appropriate, up from 67% in 2012.
Q1 2015
Election casts a long shadow
The Deloitte CFO Survey
April 2015

2. Chart 1. Risk to business posed by the following factors
Weighted average ratings on a scale of 0 – 100 where 0 stands for no risk and 100 stands for the
highest possible risk
35 40 45 50 55 60 65
A bubble in housing and/or other real and financial
assets and the risk of higher inflation
The prospect of higher interest rates and a general
tightening of monetary conditions in the UK and US
Weakness and or volatility in emerging markets and
rising geopolitical risks in Middle East/Ukraine
Deflation and economic weakness in the euro area,
and the possibility of a renewed euro crisis
A future UK referendum on membership of the EU
The May 2015 UK General Election and
the risk of policy change and uncertainty
2015 Q1 2014 Q3
58
50
56
50
50
49
46
45
45
47
38
42
The Deloitte CFO Survey

3. This quarter’s survey shows that CFOs think the General
Election poses risks to what is seen as a benign policy
environment. A clear majority of CFOs see the potential
for adverse changes on regulation and taxation. And, on
balance, the expectation is that post‑election changes
will be negative for fiscal, monetary and labour market
policies. Meanwhile the risk of a future referendum on
EU membership ranks not far below the General Election
itself as a threat.
The Deloitte CFO Survey
Corporate hiring and investment has led the
recovery in the last two years. Yet this quarter’s
CFO Survey demonstrates that business‑hostile
policy change remains a potent threat to the
recovery. The last seven years have provided
ample evidence of the corrosive effects of
uncertainty on corporate behaviour. A weakening
of corporate risk appetite and investment
intentions provides an ominous reminder that the
business recovery is not assured.

4. Authors
Ian Stewart
Chief Economist
020 7007 9386
istewart@deloitte.co.uk
Debapratim De
Senior Economic Analyst
020 7303 0888
dde@deloitte.co.uk
Alex Cole
Economic Analyst
020 7007 2947
alecole@deloitte.co.uk
Contacts
Ian Stewart
Chief Economist
020 7007 9386
istewart@deloitte.co.uk
Mark FitzPatrick
Vice Chairman and
CFO Programme Leader
020 7303 5167
mfitzpatrick@deloitte.co.uk
For current and past copies of the
survey, historical data and coverage of
the survey in the media and elsewhere,
please visit:
www.deloitte.co.uk/cfosurvey
The Deloitte CFO Survey

5. CFO perceptions of economic and financial uncertainty rose again in the first quarter.
63% of CFOs now rate the level of uncertainty facing their businesses as above normal, high or very high –
the highest reading in almost two years.
Chart 2. Uncertainty
% of CFOs who rate the level of external financial and economic uncertainty facing their business as
above normal, high or very high
45%
55%
65%
75%
85%
95%
2015
Q1
14
Q4
14
Q3
14
Q2
14
Q1
13
Q4
13
Q3
13
Q2
13
Q1
12
Q4
12
Q3
12
Q2
12
Q1
11
Q4
11
Q3
11
Q2
11
Q1
10
Q4
2010
Q3
Uncertainty up

6. Rising uncertainty has coincided with a continued reduction in risk appetite, which is now at a two‑year low.
51% of CFOs say that now is a good time to take greater risk onto their balance sheets, down from a record high of
72% six months ago.
0%
10%
20%
30%
40%
50%
60%
70%
80%
2015
Q1
2014
Q3
2014
Q1
2013
Q3
2013
Q1
2012
Q3
2012
Q1
2011
Q3
2011
Q1
2010
Q3
2010
Q1
2009
Q3
2009
Q1
2008
Q3
2008
Q1
2007
Q3
Chart 3. Risk appetite
% of CFOs who think this is a good time to take greater risk onto their balance sheets
Uncertainty up

7. This fall in risk appetite appears to be driven by CFO concerns over policy change after the General Election, as
highlighted in Chart 1.
Corporates see the current policy environment as fairly benign. Last September, as risk appetite hit a record high,
a majority of CFOs rated UK government policy as appropriate across ten areas.
More than 90% of them reported policy settings as appropriate for labour market, taxation and monetary policy.
Uncertainty up
0 20 40 60 80 100
General levels of regulation affecting business
Infrastructure
Energy policy
Education & training
Urban and town planning
Financial regulation
Public expenditure
Taxation policy
Labour market
Monetary policy (including interest rates, inflation
and the availability of credit)
58%
59%
64%
70%
71%
82%
89%
90%
94%
97%
2014 Q3
Chart 4. Policy appropriateness index
% of CFOs reporting that policy settings in the following areas are appropriate for the long-term
success of businesses in the UK

8. Net negative effect Net positive effect
Chart 5. Effect of policy change
Net % of CFOs who see policy change in the following areas, after
the General Election, as having a positive effect on their business
-80-70-60-50-40-30-20-10 0 10 20 30 40
Infrastructure
Education and training
Urban and town planning
Energy policy
Labour market
Monetary policy (including interest rates,
inflation and the availability of credit)
Fiscal policy (government borrowing
and debt)
Financial regulation
Taxation
General levels of regulation affecting
business
%
-66%
-50%
-40%
-31%
-25%
-20%
-15%
4%
15%
28%
CFOs believe that the General
Election poses risks to what is seen
as a generally benign policy
environment. A clear majority of
CFOs see the potential for adverse
changes on regulation and tax.
And, on balance, the expectation is
that post‑election changes will be
negative for fiscal, monetary and
labour market policies.
At the same time, CFOs anticipate
that changes to policy on
infrastructure, education and
training, and urban and town
planning would be beneficial for
their businesses.
Policy change key concern

9. The rise in uncertainty over UK economic policy is also reflected in an uptick in press references to economic
policy uncertainty.
Chart 6. Economic Policy Uncertainty Index
News-based index of UK economic policy uncertainty index (four-month quarter moving average)
0
50
100
150
200
250
300
350
400
450
2015
2014
2013
2012
2011
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
2000
1999
1998
1997Policy change key concern

10. Chart 7. Probability of Greek default
The percentage probability of a Greek sovereign default, based on credit default swap prices
50%
60%
70%
80%
90%
100%
Apr
15
Dec
14
Aug
14
Apr
14
Dec
13
Aug
13
Apr
13
Dec
12
Aug
12
Apr
12
Dec
11
Aug
11
Apr
11
Dec
10
Aug
10
Apr
10
Source: Fathom Consulting, Thomson Reuters Datastream
Developments in Europe have also weighed on corporate risk appetite.
Despite recent improvements in the economic outlook for the euro area, political wrangling over Greek austerity and
debt repayments has kept the euro crisis in the headlines.
The probability of a Greek default – as inferred from the cost of insuring against this event – has risen sharply this year.
Policy change key concern

11. Chart 8. Corporate priorities in the next 12 months
% of CFOs who rated each of the following as a strong priority for their business in the next 12 months
0% 5% 10% 15% 20% 25% 30% 35% 40%
Reducing leverage
Disposing of assets
Raising dividends or share buybacks
Expanding by acquisition
Increasing capital expenditure
Introducing new products/services or
expanding into new markets
Reducing costs
Increasing cash flow
2015 Q1 2014 Q4
33%
33%
37%
28%
31%
20%
23%
16%
22%
14%
16%
7%
6%
6%
8%
29%
Defensive strategies – increasing cash flow and reducing costs – remain the top priorities for CFOs.
Compared to the fourth quarter of last year CFOs are placing less emphasis on expansionary strategies such as
introducing new products or services, expanding by acquisition and capital expenditure.
Defensive strategies in favour

12. CFOs have scaled down their expectations for growth in capital spending.
A net 53% expect UK corporates to increase capital expenditure over the next 12 months, down from a peak of
80% a year ago.
Chart 9. Outlook for capital expenditure
Net % of CFOs who expect UK corporates’capital expenditure to increase over the next 12 months
-80%
-60%
-40%
-20%
0%
20%
40%
60%
80%
100%
15
Q1
14
Q4
14
Q3
14
Q2
14
Q1
13
Q4
13
Q3
13
Q2
13
Q1
12
Q4
12
Q3
12
Q2
12
Q1
11
Q4
11
Q3
11
Q2
11
Q1
10
Q4
10
Q3
IncreaseDecrease
Defensive strategies in favour

13. Chart 10 compares the
effect of nine key factors on
corporate investment plans
between the first quarter of
last year and now. The further
a coloured line in the chart
is from the centre, the more
the factor acts to support
investment.
Uncertainty is the biggest,
and a growing, depressant on
investment.
The main drivers of investment
are easy access to external
financing, a strengthening UK
recovery and rising demand
for businesses’ products and
services.
CFOs’ assessment of the effect of each of the following factors on their
investment plans:
On a 10-point scale where 0 implies the most negative effect and
10 the most positive
Chart 10. Factors affecting corporate investment plans
2
3
0
1
4
5
6
7
8
9
10
Availability of internal finance
2015 Q1
2014 Q1
Uncertainty about the economic
and financial environment
Fiscal consolidation
in the UK (tax rises, cuts
in public spending)
Actual or
expected levels
of economic
activity/GDP
growth in the
euro area
Actual or expected
levels of economic
activity/GDP
growth in
emerging
markets
Morepositive
Actual or expected levels of
economic activity/GDP growth in
the rest of the world (including
the US, Japan and Asia-Pacific)
Cost and availability
of external finance
Actual or
expected levels
of economic
activity/GDP
growth
in the UK
Secular or long-term
growth for your products
or services
Uncertainty weighing on investment plans

14. Strong fundamentals
Despite rising uncertainty, expectations for revenues and operating margins have softened modestly and remain well
above their long-term averages.
Chart 11. Outlook for corporate revenues and margins
Net % of CFOs who expect UK corporates’ revenues and margins to increase over the next 12 months
-80%
-60%
-40%
-20%
0%
20%
40%
60%
80%
100%
15
Q1
14
Q4
14
Q3
14
Q2
14
Q1
13
Q4
13
Q3
13
Q2
13
Q1
12
Q4
12
Q3
12
Q2
12
Q1
11
Q4
11
Q3
11
Q2
11
Q1
10
Q4
10
Q3
IncreaseDecrease
Revenues
Operating margins

15. Strong fundamentals
Financing conditions remain benign for the large corporates on our survey panel. The cost of credit has hit a
seven-and-a-half-year low this quarter and availability remains close to a seven-year high.
CFOs also rate debt finance – bank borrowing and bond issuance – as the most attractive source of external funding.
Compared to the average reading from our sister surveys across 13 major European countries, a significantly
larger proportion of UK CFOs rated debt finance as an attractive source of funding.
Chart 12. Cost and availability of credit
Net % of CFOs reporting credit is costly and credit is easily available
-100%
-80%
-60%
-40%
-20%
0%
20%
40%
60%
80%
100%
15
Q1
14
Q3
14
Q1
13
Q3
13
Q1
12
Q3
12
Q1
11
Q3
11
Q1
10
Q3
10
Q1
09
Q3
09
Q1
08
Q3
08
Q1
07
Q3
-100%
-80%
-60%
-40%
-20%
0%
20%
40%
60%
80%
100%
CreditisavailableCreditishardtoget
Availability of Credit (RHS)
Cost of credit (LHS)
CreditiscostlyCreditischeap

16. Strong fundamentals
A majority of UK CFOs expect inflation to hover around the Bank of England’s 2.0% target rate in two years’ time.
However, a growing proportion expect lower inflation, with more than a third anticipating it to be between zero
and 1.5%.
Chart 13. Inflation expectations
% of CFOs who expect consumer price inflation in the UK to lie between the following ranges in two
years’ time
0%
10%
20%
30%
40%
50%
60%
70%
80%
2.6% – 3.5%1.6% – 2.5%0 –1.5%Below zero
2014 Q4 2015 Q1
0% 0%
21%
36%
58%
8%
5%
71%

17. The macroeconomic backdrop to the Deloitte
CFO Survey Q1 2015
Global equity markets rose 4.5% in the first quarter
and yields on developed economy sovereign bonds
fell. The price of oil stabilised somewhat although at a
significantly lower level than its 2014 peak. Lower oil
prices provided a boost to consumers across the globe
through lower inflation and a rise in disposable incomes.
Financial markets reacted positively to the launch of
the European Central Bank’s (ECB) quantitative easing
programme, with risk assets rallying in Europe and
equities hitting a record high in Germany. European
bond yields also fell and Spanish and Italian yields hit
record lows.
Despite renewed concerns over a euro area break-up
following the election of anti-austerity party Syriza in
Greece, a number of euro area economic indicators
showed signs of improvement. The ECB upgraded its
euro area growth forecast for 2015 to 1.5% from 1.0%.
Economists also upgraded growth forecasts for the UK.
The FTSE 100 continued to perform strongly, breaking
through the 7,000 mark for the first time, with markets
buoyed by the prospect of UK and US interest rates
remaining lower for longer.
CFO Survey: Economic and financial context

18. Quarter-on-quarter
growth
Year-on-year
growth
201520142013201220112010200920082007
-7
-6
-5
-4
-3
-2
-1
0
1
2
3
4 Forecasts
UK GDP growth: Actual and forecast (%)
Source: ONS, consensus forecasts from The Economist and Deloitte calculations
UK recovery
steady
CFO Survey: Economic and financial context

19. CFO Survey: Economic and financial context
FTSE 100 price index
Source: Thomson Reuters Datastream
3000
3500
4000
4500
5000
5500
6000
6500
7000
20152014201320122011201020092008
The FTSE 100
hit record highs

20. Private sector hiring
outpacing public sector job cuts
Private sector
UK private and public sector job growth (thousands)
Source: Thomson Reuters Datastream
Public sector
-300
-200
-100
0
100
200
300
400
500
Q3
2014
Q4
2013
Q1
2013
Q2
2012
Q3
2011
Q4
2010
Q1
2010
Q2
2009
Q3
2008
Q4
2007
Q1
2007
-300
-200
-100
0
100
200
300
400
500
CFO Survey: Economic and financial context

21. CFO Survey: Economic and financial context
February CPI inflation
lowest on record
0
1
2
3
4
5
6
7
8
9
UK annual CPI inflation (%)
Source: Thomson Reuters Datastream
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015

22. Two-chart summary of key survey messages
0%
10%
20%
30%
40%
50%
60%
70%
80%
Risk appetite
% of CFOs who think this is a good time to take
greater risk onto their balance sheets
2015Q1
2014Q3
2014Q1
2013Q3
2013Q1
2012Q3
2012Q1
2011Q3
2011Q1
2010Q3
2010Q1
2009Q3
2009Q1
2008Q3
2008Q1
2007Q3
Net negative effect Net positive effect
Effect of policy change
Net % of CFOs who see policy change in the following areas,
after the General Election, as having a positive effect on their
business
-80 -60 -40 -20 0 20 40
Infrastructure
Education and training
Urban and town planning
Energy policy
Labour market
Monetary policy (including interest rates,
inflation and the availability of credit)
Fiscal policy (government
borrowing and debt)
Financial regulation
Taxation
General levels of regulation
affecting business
%
-66%
-50%
-40%
-31%
-25%
-20%
-15%
4%
15%
28%

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About the survey
This is the 31st
quarterly survey of Chief Financial Officers and Group Finance Directors
of major companies in the UK. The 2015 first quarter survey took place between
6th
and 23rd
March. 108 CFOs participated, including the CFOs of 21 FTSE 100 and
45 FTSE 250 companies. The rest were CFOs of other UK‑listed companies, large private
companies and UK subsidiaries of major companies listed overseas. The combined market
value of the 72 UK‑listed companies surveyed is £380 billion, or approximately 16% of the UK
quoted equity market.
The Deloitte CFO Survey is the only survey of major corporate users of capital that gauges
attitudes to valuations, risk and financing. To join our panel of CFO respondents and for
additional copies of this report, please contact Anthea Neagle on 020 7303 0116 or email
aneagle@deloitte.co.uk.