UK appetite for corporate debt at 14-year low – Deloitte CFO survey

LONDON, Jan 3 (Reuters) – British corporations’ urge for food to borrow and difficulty debt is on the lowest degree because the monetary disaster, with demand for credit score effectively beneath common ranges and flagging, in keeping with Deloitte’s quarterly survey of chief monetary officers.

Some 70% of the CFOs surveyed rated credit score as “pricey”, reflecting an increase in Britain’s base fee to three.5%, and solely 28% of them anticipated their firm’s demand for it to extend within the subsequent 12 months.

As well as, 45% of the CFOs mentioned new credit score was laborious to get, the survey discovered.

Deloitte’s chief economist Ian Stewart mentioned essentially the most aggressive tightening of financial coverage in additional than 30 years was reshaping company attitudes to debt.

“Not because the credit score crunch have CFOs rated debt as being much less enticing as a supply of finance for his or her companies than they do right this moment,” he mentioned.

“When rates of interest have been at very low ranges, debt finance simply eclipsed fairness as a supply of finance. CFOs now see them as being roughly on par.”

Regardless of the difficult financial surroundings, the executives’ notion of exterior danger, and specifically inflation, had eased since October’s peak, the survey discovered.

On common the CFOs forecast inflation, which stood at 10.7% in November, would fall to five.8% in a yr’s time and can be 3.3% in two years’ time, it mentioned.

Deloitte mentioned it surveyed 78 CFOs, of whom 17 have been from corporations within the FTSE 100 and 32 have been within the FTSE 250, between Dec. 6 and Dec. 16.

Reporting by Paul Sandle; Modifying by Alex Richardson

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