Grexit Does Not Worry UK CFOs

The financial heads of major UK companies are least worried about “Grexit”. The financial disturbances across the eurozone are not preventing these companies from making bigger expansion plans and taking more risks.

The results of a survey of 122 CFOs, which was conducted by Deloitte, a leading accountancy firmfrom June 12 – 29, reveal that the focus on expansion is more than what it was during the last four years. These companies are prioritizing more on launching new products into existing markets and expanding into new markets than on developing cost-cutting strategies. The companies surveyed comprised 22% of the country’s equity market.

Ian Stewart, who functions as the chief economist at Deloitte, said:

CFOs have shrugged off the effects of the recent sell-off in equity markets and the escalating crisis in Greece. The fears about uncertainty that dampened corporate spirits in the run-up to the general election have also fallen away.

Another corporate survey of 1,500 medium and small-sized companies, conducted by Lloyds, revealed a similar picture. Small and medium sized companies are confident of remaining stable.

Chancellor George Osborne, however, doesn’t share the same enthusiasm. Speaking at the BBC’s Andrew Marr Show, he said that he would meet Bank of England Governor Mark Carney along with the prime minister on Monday to assess the Greece situation. He said:

I don’t think anyone should be in any doubt: the Greek situation has an impact on the European economy, which has an impact on us, and we cannot be immune.

Seventy-five percent of the CFOs surveyed by Deloitte opined that the UK should remain in the EU in the best interests of its businesses. But 2% were of the opinion that the country should exit the EU. The remaining 23 percent said that they would reveal a clear opinion after David Cameron re-negotiates the UK – EU relations.

A majority of the CFOs had full faith in Cameron’s abilities to negotiate effectively. A large 83% of them were of the opinion that these negotiations would give the country more control over the welfare funds of EU migrants, and 76% said that they hoped it would reduce the “red tape.”

The UK business community, however, has a difference of opinion. Business for Britain, a group that is highly critical of the UK’s EU membership, stated in a report of last month that the worst decision Britain can make is to stick to an EU that refuses to reform.