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Business confidence among the UK's largest companies has fallen to its lowest level since the COVID-19 pandemic, according to a Deloitte survey. CFO sentiment dropped sharply as concerns over rising energy prices, inflation and interest rates increased amid the Middle East conflict. Companies are responding by cutting costs, reducing hiring plans and scaling back investments. Inflation expectations have also risen, adding to business uncertainty. The hiring outlook remains weak, with a significant number of firms expecting lower recruitment. The findings reflect growing pressure on UK businesses as they navigate higher costs and an uncertain economic environment.
Business confidence among the UK's largest companies has dropped to its lowest level since the onset of the COVID-19 pandemic, amid rising concerns over energy prices and interest rates linked to the ongoing Middle East conflict, a Deloitte survey showed. Advertisement
The quarterly survey of chief financial officers (CFOs) reported that net confidence fell sharply to -57 per cent in the second half of March, compared to -13 per cent at the end of 2025. This marks the weakest reading since the first quarter of 2020.
According to Deloitte, companies are shifting focus towards cost control, scaling back hiring, discretionary spending and investment plans. The survey is closely tracked as an indicator of corporate sentiment in the UK.
Rising energy costs and inflation remain key concerns. Around 61 per cent of CFOs said they were significantly worried about higher energy prices leading to increased inflation and interest rates. Inflation expectations for the next 12 months have risen to 3.6 per cent, the highest level since the third quarter of 2023.
The survey also indicated a slowdown in hiring outlook. A net 79 per cent of CFOs expect a reduction in recruitment over the next year, up from 55 per cent in the previous quarter. This is the highest level recorded since mid-2020.
Recent data from S&P Global also pointed to slower growth in the private sector during March, as rising costs impacted business activity. Public expectations around inflation have also increased.
Despite the cautious outlook, a separate survey by the Recruitment and Employment Confederation (REC) suggested that while hiring conditions remain weak, the labour market has shown signs of stabilisation in recent months.
The Deloitte survey, conducted between March 16 and 30, covered 79 CFOs, including representatives from FTSE 100 and FTSE 250 companies, along with large private firms and multinational subsidiaries operating in the UK.
The findings highlight growing pressure on businesses as they navigate cost challenges and uncertain economic conditions.
Source: Reuters
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