The quarterly CFO Survey is firmly established with media and policy makers as the authoritative barometer of UK corporates’ sentiment and strategies. It is the only survey of major corporate users of capital that gauges attitudes to valuations, risk and financing.

1. Corporate risk appetite and sentiment have faded in the
face of weakness in emerging economies and global
equity markets. Chief Financial Officers’ perceptions of
external financial and economic uncertainty have seen the
sharpest rise in five years.
Moves in financial markets and risk appetite among CFOs
are closely correlated. Both react to similar factors and
financial markets directly influence corporates, for instance
through the availability and pricing of capital. Equities sold
off in the third quarter, with emerging markets seeing the
largest outflow of capital since the financial crisis. With
UK equities down 18% in the last three months there has
been a parallel loss of risk appetite among the UK’s major
corporates.
The proportion of CFOs who think now is a good time
to take risk has dropped to 46%, down from 59% in the
second quarter and a peak of 72% a year ago. Rising risk
aversion is feeding into a more defensive stance on the
part of major corporates, with a greater focus on cost
reduction and rather less on investment.
Despite the recent more emollient tone by Western central
banks, CFOs see the prospect of tighter monetary policy
in the UK and the US as the greatest risk facing their
businesses.
From the Bank of England’s point of view this may be
the worst of both worlds – a corporate sector which is
worried both about the prospect of higher interest rates
and slower global growth.
Q3 2015
Uncertainty mounts
The Deloitte CFO Survey
October 2015

2. The Deloitte CFO Survey
Chart 1. Uncertainty
% of CFOs who rate the level of external financial and economic uncertainty facing their business
as above normal, high or very high
45%
55%
65%
75%
85%
95%
15
Q3
15
Q2
15
Q1
14
Q4
14
Q3
14
Q2
14
Q1
13
Q4
13
Q3
13
Q2
13
Q1
12
Q4
12
Q3
12
Q2
12
Q1
11
Q4
11
Q3
11
Q2
11
Q1
10
Q4
10
Q3

3. The slowdown in emerging markets now ranks joint
second, together with concerns about euro area growth,
on CFOs’ list of worries. Against a backdrop of flagging
business confidence the recent moves by the Bank
of England and the US Federal Reserve to signal that
interest rates are likely to stay lower for longer look well
judged.
The firms on the CFO Survey panel are large and have
heavy overseas exposure, with more than half of their
revenues coming from outside the UK. While external
risks are centre stage, CFOs are positive on prospects for
the UK economy.
The Deloitte CFO Survey
CFOs rate uncertainty and emerging market
weakness as constraints on investment but
see the state of the UK economy as being a
significant support for investment.
The UK’s recovery from recession has been
punctuated by a series of external shocks, of
which weakness in emerging markets is the
latest. A strong pound and weaker demand in
emerging markets dim prospects of an export-led
recovery – and put greater weight
on domestic demand to drive UK growth.

4. Authors
Ian Stewart
Chief Economist
020 7007 9386
istewart@deloitte.co.uk
Debapratim De
Senior Economic Analyst
020 7303 0888
dde@deloitte.co.uk
Alex Cole
Economic Analyst
020 7007 2947
alecole@deloitte.co.uk
Contacts
Ian Stewart
Chief Economist
020 7007 9386
istewart@deloitte.co.uk
Richard Muschamp
CFO Programme Leader
020 7007 0724
rmuschamp@deloitte.co.uk
For current and past copies of the
survey, historical data and coverage of
the survey in the media and elsewhere,
please visit:
www.deloitte.co.uk/cfosurvey
The Deloitte CFO Survey

5. Corporate risk appetite tends to follow moves in equity markets.
The third quarter saw a rise in investor risk aversion as they moved away from riskier assets and into safer
government bonds.
This has fed through to a fall in risk appetite among CFOs. 46% of them say now is a good time to take greater risk
onto balance sheets, down from 59% in the previous quarter.
Risk appetite down
Chart 2. Corpor ate and investor risk appetite
% of CFOs who think this is a good time to take greater risk onto their balance sheets
and the ratio of the price of UK equities to that of UK government bonds
20
25
30
35
40
45
0%
10%
20%
30%
40%
50%
60%
70%
80%
15
Q3
15
Q1
14
Q3
14
Q1
13
Q3
13
Q1
12
Q3
12
Q1
11
Q3
11
Q1
10
Q3
10
Q1
09
Q3
09
Q1
08
Q3
08
Q1
07
Q3
Equities vs Bonds (RHS) Risk appetite (LHS)

6. The fall in corporate risk appetite has also coincided with a rise in financial market volatility.
The VIX Index – a measure of volatility in equity markets, sometimes described as the ‘fear gauge’ – has risen sharply
during the third quarter.
Chart 3. Financial market volatility
VIX Index – A measure of equity market volatility
5
15
25
35
45
55
65
75
85
2015201420132012201120102009200820072006
Risk appetite down

7. The global recovery from the financial crisis has been uneven. Since 2008, growth rates in emerging markets, and
particularly China, have far exceeded those of Western economies.
However, the outlook for growth in Europe, the UK and the US is now looking more positive, as their economies
accelerate, while Chinese growth slows in the coming years.
Risk appetite down
Chart 4. Growth prospects
Annual average GDP growth rates for 2008-14 and forecasts for 2015-16 (% YoY)
-1%
0%
1%
2%
3%
4%
5%
6%
7%
8%
9%
10%
ChinaUnited StatesUnited KingdomEuro area
2008–14 2015–16
-0.1
1.6
0.5
2.5
3.1
8.8
6.5
1.1

8. Consumer confidence and business sentiment, which tend to move in the same direction, have diverged lately.
The large UK corporates on our survey panel are more exposed than consumers to weakness in emerging markets.
While consumer confidence is near a 15-year high in the UK, reflecting low inflation and rising wages, CFOs are far
less optimistic about the financial prospects of their companies.
Rate rise biggest risk to business
Chart 5. Business and confidence
Net % of CFOs who are more optimistic about financial prospects for their company now than
three months ago
-70%
-50%
-30%
-10%
10%
30%
50%
70%
15
Q3
15
Q1
14
Q3
14
Q1
13
Q3
13
Q1
12
Q3
12
Q1
11
Q3
11
Q1
10
Q3
10
Q1
09
Q3
09
Q1
08
Q3
08
Q1
07
Q3
MoreoptimisticLessoptimistic
10
5
0
-5
-10
-15
-20
-25
-30
-35
-40
Business confidence (LHS)
Consumer
confidence (RHS)

9. Despite the recent more emollient
tone by Western central banks, CFOs
see the prospect of tighter monetary
policy in the UK and the US as the
greatest risk facing their businesses.
Concerns over weakness and
volatility in emerging markets have
also risen sharply in the third quarter,
and CFOs now rate it as the second
biggest risk to their businesses.
By contrast, concerns over the UK
economy such as weak productivity,
planned cuts in public spending, and
the risk of asset price bubbles are at
the bottom of CFOs’ worry list.
Chart 6. Risk to business posed by the following factors
Weighted average ratings on a scale of 0-100 where 0 stands for
no risk and 100 stands for the highest possible risk
30 35 40 45 50
Poor productivity/weak
competitiveness in the UK economy
Planned cuts in UK public expenditure
in this parliament
A bubble in housing and/or other real
and financial assets and the
risk of higher inflation
The UK referendum on
membership of the EU
Weak demand in the UK
Deflation and economic weakness in
the euro area, and the possibility
of a renewed euro crisis
Weakness and/or volatility in emerging
markets and rising geopolitical risks
in Middle East/Ukraine
The prospect of higher interest rates
and a general tightening of monetary
conditions in the UK and US
2015 Q3 2015 Q2
48
49
43
47
49
44
45
42
42
41
34
35
40
38
47
Rate rise biggest risk to business

10. Introducing new products and
services or expanding into new
markets – an expansionary strategy –
remains the top priority for CFOs.
However, they have sharpened their
focus on defensive strategies such
as reducing costs and increasing
cash flow.
They are also placing less emphasis
on expanding by acquisition or
increasing capital expenditure.
Sharper focus on defensive strategies
2015 Q22015 Q3
22%
19%
23%
22%
10%
10%
9%
10%
15%
8%
34%
34%
31%
34%
41%
39%
Chart 7. Corporate priorities in the next 12 months
% of CFOs who rated each of the following as a strong priority for
their business in the next 12 months
0% 10% 20% 30% 40% 50%
Raising dividends or share buybacks
Disposing of assets
Reducing leverage
Increasing capital expenditure
Expanding by acquisition
Reducing costs
Increasing cash flow
Introducing new products/services or
expanding into new markets

11. CFOs have scaled down their expectations for growth in hiring, capital expenditure and discretionary spending by
UK corporates.
Sharper focus on defensive strategies
-100%
-80%
-60%
-40%
-20%
0%
20%
40%
60%
80%
100%
2015Q2
2015Q3
2015Q1
2014Q4
2014Q3
2014Q2
2014Q1
2013Q4
2013Q3
2013Q2
2013Q1
2012Q4
2012Q3
2012Q2
2012Q1
2011Q4
2011Q3
2011Q2
2011Q1
2010Q4
2010Q3
Hiring
Capital
expenditure
Discretionary spending
IncreaseDecrease
Chart 8. Outlook for capital expenditure, hiring and discretionary spending
Net % of CFOs who expect UK corporates’ capital expenditure, hiring and discretionary spending to
increase over the next 12 months

12. Chart 9 compares the effect of nine key
factors on corporate investment plans
between Q3 2014 and now. The further
the coloured lines in the chart are from the
centre, the more the factor acts to support
investment. Readings below five indicate that
the factor acts as a depressant on investment.
Uncertainty continues to be the greatest
constraint on investment plans.
Fiscal consolidation in the UK and weakness
in emerging markets are the next biggest
depressants. CFOs are particularly concerned
about the slowdown in China. In response to
another question, 60% of them said that it
will have modest to significant negative effects
on their business over the next 12 months.
Easy access to external funding, the state
of the UK economy and rising demand for
businesses’ products and services remain the
main drivers of investment.
Chart 9. Factors affecting corporate investment plans
CFOs’ assessment of the effect of each of the following factors
on their investment plans:
On a 10-point scale where 0 implies the most negative effect
and 10 the most positive
2014 Q3 – Effect over last 12 months
2015 Q3 – Effect over last 12 months
Uncertainty about the economic
and financial environment
Fiscal consolidation in the UK
(tax rises, cuts in public
spending)
Actual or expected
levels of economic
activity/GDP growth
in the euro area
Actual or expected
levels of economic
activity/GDP growth
in emerging markets
Actual or expected levels of economic
activity/GDP growth in the rest of the
world (including the US, Japan and
Asia-Pacific)
Morepositive
Availability of
internal finance
Cost and availability
of external finance
Actual or
expected levels
of economic
activity/GDP
growth
in the UK
Secular or long-term
growth for products
or services
2
0
1
4
5
6
7
8
9
10
3
Uncertainty weighing on investment plans

13. Financing conditions benign
The large corporates on our survey panel continue to have easy access to credit. The cost of credit remains close to
its lowest level in eight years while credit availability is just shy of an eight-year high.
CFOs also rate debt finance – bank borrowing and bond issuance – as the most attractive source of external funding.
Chart 10. Cost and availability of credit
Net % of CFOs reporting credit is costly and credit is easily available
-100%
-80%
-60%
-40%
-20%
0%
20%
40%
60%
80%
100%
15
Q3
15
Q1
14
Q3
14
Q1
13
Q3
13
Q1
12
Q3
12
Q1
11
Q3
11
Q1
10
Q3
10
Q1
09
Q3
09
Q1
08
Q3
08
Q1
07
Q3
CreditiscostlyCreditischeap
Creditisavailable
Cost of credit (LHS)
Cost of credit (LHS)
Availability of credit (RHS)
Availability of credit (RHS)
Creditishardtoget
-100%
-80%
-60%
-40%
-20%
0%
20%
40%
60%
80%
100%

14. Financing conditions benign
A majority of CFOs expect inflation to hover around the Bank of England’s 2.0% target in two years’ time.
However, a growing proportion anticipate considerably lower inflation, with almost 40% expecting it to be between
0 and 1.5%.
Chart 11. Inflation expectations
% of CFOs who expect consumer price inflation in the UK to lie between the following ranges
in two years’ time
0%
10%
20%
30%
40%
50%
60%
70%
Above 2.5%1.6%-2.5%0-1.5%
2015 Q2 2015 Q3
39%
31%
64%
5% 5%
56%

15. Financing conditions benign
Markets have responded to recent communications from the US Federal Reserve and the Bank of England by
pushing back their expectations for the timing of rate rises.
Over the third quarter, futures traders significantly lowered their interest rate expectations for the end of next year.
0.8
1.0
1.2
1.4
1.6
1.8
2.0
2.2
Sep-14 Nov-14 July-15 Sep-15Jan-14 Mar-15 May-15
Chart 12. Interest rate expectations
Market expectations for 90-day sterling LIBOR in December 2016 (%)

16. The macroeconomic backdrop to the Deloitte CFO
Survey Q3 2015
The UK and US economies saw steady groth in the third
quarter, with consumers benefiting from low inflation
and rising wages. However, a number of industrial
indicators pointed to a softening of activity in the West,
with slowing growth in key emerging markets acting
as a drag on output. Slowing activity in the Chinese
economy caused particular concern, resulting in a sell-
off in Chinese equities. Weakness in China and falling
commodity prices dented confidence in other key
emerging markets, whose currencies fell sharply against
the US dollar.
The Institute of International Finance estimates that
emerging markets saw more than $40bn of capital
outflows between July and September, the largest
reversal since the height of the global financial
crisis. With investors increasingly unsettled, global
stock markets lost more than $10tn in value, their
worst quarterly performance since 2011. Yields on
developed market bonds rose. Against this backdrop,
and with inflation remaining low, central banks opted
to keep monetary policy accommodative. The US
Federal Reserve opted to keep rates on hold, the Bank
of England moved to dampen expectations of an
imminent rate rise in the UK and the ECB opened the
door for further quantitative easing in the euro area.
CFO Survey: Economic and financial context

17. Quarter-on-quarter
growth
Steady
recovery
Year-on-year
growth
2016201520142013201220112010200920082007
-7
-6
-5
-4
-3
-2
-1
0
1
2
3
4 Forecasts
UK GDP growth: Actual and forecast (%)
Source: ONS, consensus forecasts from The Economist and Deloitte calculations
CFO Survey: Economic and financial context

18. CFO Survey: Economic and financial context
Source: Thomson Reuters Datastream
3,000
3,500
4,000
4,500
5,000
5,500
6,000
6,500
7,000
201620152014201320122011201020092008
The FTSE 100
sold-off in Q3

19. Private sector
UK private and public sector job growth (thousands)
Source: Thomson Reuters Datastream
Public sector
-300
-200
-100
0
100
200
300
400
500
Q2
2015
Q3
2014
Q4
2013
Q1
2013
Q2
2012
Q3
2011
Q4
2010
Q1
2010
Q2
2009
Q3
2008
Q4
2007
Q1
2007
-300
-200
-100
0
100
200
300
400
500
Private sector
job growth
offsets public
sector losses
CFO Survey: Economic and financial context

20. CFO Survey: Economic and financial context
CPI inflation close to record lows
0
1
2
3
4
5
6
7
8
9
UK annual CPI inflation (%)
Source: Thomson Reuters Datastream
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015

21. Two-chart summary of key survey messages
0
10%
20%
30%
40%
50%
60%
70%
80%
15
Q3
15
Q1
14
Q3
14
Q1
13
Q3
13
Q1
12
Q3
12
Q1
11
Q3
11
Q1
10
Q3
10
Q1
09
Q3
09
Q1
08
Q3
08
Q1
07
Q3
Business and consumer confidence
Net % of CFOs who are more optimistic about
financial prospects for their company now than three
months ago and the GfK consumer confidence index
-70%
-50%
-30%
-10%
10%
30%
50%
70%
15
Q3
15
Q1
14
Q3
14
Q1
13
Q3
13
Q1
12
Q3
12
Q1
11
Q3
11
Q1
10
Q3
10
Q1
09
Q3
09
Q1
08
Q3
08
Q1
07
Q3
MoreoptimisticLessoptimistic
10
5
0
-5
-10
-15
-20
-25
-30
-35
-40
Business confidence (LHS)
Consumer
confidence (RHS)
Corporate and investor risk appetite
% of CFOs who think this is a good time to take
greater risk onto their balance sheets and the
ratio of the price of UK equities to that of UK
government bonds
20
25
30
35
40
45
Equities vs Bonds (RHS) Risk appetite (LHS)

22. Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited (“DTTL”), a UK private company limited by guarantee, and its network of member
firms, each of which is a legally separate and independent entity. Please see www.deloitte.co.uk/about for a detailed description of the legal structure
of DTTL and its member firms.
Deloitte LLP is the United Kingdom member firm of DTTL.
This publication has been written in general terms and therefore cannot be relied on to cover specific situations; application of the principles set
out will depend upon the particular circumstances involved and we recommend that you obtain professional advice before acting or refraining from
acting on any of the contents of this publication. Deloitte LLP would be pleased to advise readers on how to apply the principles set out in this
publication to their specific circumstances. Deloitte LLP accepts no duty of care or liability for any loss occasioned to any person acting or refraining
from action as a result of any material in this publication.
© 2015 Deloitte LLP. All rights reserved.
Deloitte LLP is a limited liability partnership registered in England and Wales with registered number OC303675 and its registered office at 2 New
Street Square, London EC4A 3BZ, United Kingdom. Tel: +44 (0) 20 7936 3000 Fax: +44 (0) 20 7583 1198.
Designed and produced by The Creative Studio at Deloitte, London. J1723
About the survey
This is the 33rd
quarterly survey of Chief Financial Officers and Group Finance Directors of
major companies in the UK. The 2015 third quarter survey took place between 9th and
28th September. 122 CFOs participated, including the CFOs of 23 FTSE 100 and 56 FTSE
250 companies. The rest were CFOs of other UK-listed companies, large private companies
and UK subsidiaries of major companies listed overseas. The combined market value of the
80 UK-listed companies surveyed is £393 billion, or approximately 19% of the UK quoted
equity market.
The Deloitte CFO Survey is the only survey of major corporate users of capital that gauges
attitudes to valuations, risk and financing. To join our panel of CFO respondents and for
additional copies of this report, please contact Anthea Neagle on 020 7303 0116 or email
aneagle@deloitte.co.uk.