As per Deloitte, confidence among chief financial officers dropped to a net -57% in late March, down from -13% in the previous quarter
Despite posting a 0.5% growth in February, dark clouds still linger large upon the British economy, with forecasts from EY Item Club indicating a flatlined GDP in the Q2 and Q3 of 2026, thereby raising the risk of a technical recession, which typically arrives after two consecutive quarters of contraction.
The EY report, along with another analysis from Deloitte, predicts a job loss tally of 250,000 by mid-2027, with growth slowing from 1.4% in 2025 to 0.7% this year. Unemployment, on the other hand, is forecast to rise to 5.8% by mid-2027, up from the current 5.2%.
“Spiralling energy costs and supply chain disruption will push the UK to the brink of a technical recession in the middle of this year. Consumers’ spending power will be squeezed, while more expensive financing arrangements and a less certain global economic backdrop will pour cold water on companies’ investment plans,” said Matt Swannell, chief economic adviser at EY Item Club, while interacting with the Guardian.
EY Item Club factored in Iran’s retaliatory closure of the Strait of Hormuz and its strikes on regional neighbours, which caused a rise in oil and gas prices, when issuing its projection.
According to the forecasting group, these factors, together, will cause the biggest economic hit for the European country since the COVID pandemic.
Deloitte’s report revealed that finance chiefs at major British companies are already cutting spending, a move that will further impact these ventures’ future activities, especially hiring.
Confidence among chief financial officers dropped to a net -57% in late March, down from -13% in the previous quarter, marking the lowest level since the start of the pandemic.
“Finance leaders are coping with high levels of external uncertainty, and their focus is on managing risks from geopolitics, rising energy prices, and higher financing costs. Rarely in the last 16 years have UK CFOs been more focused on cost control than today,” said Ian Stewart, chief economist at Deloitte UK.
Executives identified energy costs, inflation, interest rates, and cyberattacks among the main risks facing British businesses over the next three years. Firms will now shift toward defensive financial strategies, prioritising cost control and cash preservation, amid a weakening environment for investment and hiring.
