Deloitte CFO Survey: The dash for cash

Deloitte-uk-survey-account

Today’s Briefing summarises the findings of the latest Deloitte Survey of Chief Financial Officers which was released overnight. The full report is available at: https://www2.deloitte.com/uk/en/pages/finance/articles/deloitte-cfo-survey.html

The survey gauges sentiment among the UK’s largest businesses in the wake of Parliament’s rejection of Mrs May’s Brexit deal. The survey ran between 26 March and 7 April, opening just after the announcement of the first delay in Brexit and covering a period that saw the failure of the House of Commons to agree a new plan and the start of Brexit talks between the government and the Labour Party.

Despite such turbulence the latest survey shows that confidence and risk appetite among CFOs are little changed. CFOs seem to have priced in a tougher environment earlier, at the start of the year, and the latest round of Brexit uncertainties has not materially changed that picture. The fact that balance sheets are being readied for turbulence fits with findings by the Bank of England’s agents which show that around 80% of companies judge themselves ready for a no-deal, no transition Brexit.

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Posted on 15/04/2019

Navigating the China slowdown

Chinese-coin

China’s economic transformation in the last four decades is one of the great economic success stories of modern history. Through liberalisation and opening up to trade China was able to grow by 10% a year between 1980 and 2018. Its economy expanded by a factor of 30 and it easily dodged recession during the global financial crisis. There is no precedent in history for an economy of this size growing at such a rate for so long.

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Posted on 01/04/2019

Globalisation déjà vu

Compass

This morning we are launching our quarterly “Global Economy in Charts” report, a 20-page slide deck, available here. Created by my colleague Debo, the report examines the big global macro trends and challenges. Charts can be cut and pasted into your own reports. Do drop Debo a line at dde@deloitte.co.uk with ideas and comments.

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Posted on 25/03/2019

Global Economy in Charts

Download the charts in pdf format here
Download the charts in powerpoint via SlideShare here

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Posted on 25/03/2019

Brexit latest and thoughts on a slower growth world

Deloitte-uk-money-piled-up

With Brexit uncertainty undimmed we start this week’s Briefing with a short recap on the economics of leaving the EU.

The consensus among economists is that the UK will grow by 1.3% this year and 1.5% next year. With activity slowing across the world, particularly in the euro area, and the UK scheduled to leave the EU, growth at these rates looks pretty respectable. Given the uncertainties facing the UK it’s perhaps surprising that its economy is expected to outpace Italy’s or Germany’s this year.

This fairly cheery outlook for the UK comes with a major caveat. Most forecasts are predicated on the UK leaving the EU in an orderly, managed fashion. In the event of an abrupt departure without a deal UK growth forecasts would almost certainly plummet. Leaving the EU without a deal would, according to the OECD and the National Institute of Economic and Social Research, leave the UK growing by around 0.4% this year and next.

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Posted on 18/03/2019

Alarm bells ring for the euro area

Alarm

We were taken by surprise last week by the scale of the downgrade to the OECD’s latest forecast for German growth. The OECD now thinks that the German economy will grow by just 0.7% in 2019. This is a big reversal of fortune; a year ago the thinking among economists was that Germany would grow by around 2.0%. At 0.7% German growth would be slower than the euro area as a whole (1.0%) and even the Brexit-embattled UK (0.8%).

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Posted on 11/03/2019

How to reboot growth

Japan

The financial crisis of 2008-09 pitched Western economies on to a lower growth path. In recent years growth across the industrialised world has run well below the rates seen in the years before the financial crisis.

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Posted on 11/02/2019

Brexonomics

Brexit

Amid the legion of uncertainties surrounding Brexit is there much that can be said with some degree of confidence? Economic forecasts are hardly renowned for their accuracy, but they provide a starting point for thinking about the potential economic effects of Brexit.

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Posted on 21/01/2019

Who made money in 2018?

Graph

Last year was a tough one for investors, with global equity markets falling 10% overall. For UK investors most major asset classes – equities, bonds and residential property – either fell in value or saw only small gains.

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Posted on 07/01/2019

UK growth with and without a Brexit deal

Hologram

Depending on how Brexit goes 2019 could see UK growth accelerate or almost grind to a halt. So, say two forecasting groups which have modelled the economic effects of the UK’s exit from the EU.

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Posted on 26/11/2018