Big firms turn to cost cutting as finance chiefs expect inflation and rates to rise, Deloitte finds
Sixty-eight per cent of chief financial officers now rate cost reduction as a strong priority, up from 53 per cent. They expect inflation of 3.4 per cent in a year and Bank Rate at 4.0 per cent, and more of them describe credit as costly than at any point in two and a half years.
Large British companies expect inflation and interest rates to rise over the next year and are focusing increasingly on cost cutting, according to Deloitte's quarterly survey of chief financial officers, published on Wednesday, two weeks before John Healey delivers his first Budget.
The survey found that 68 per cent of chief financial officers rated cost reduction as a strong priority for the next 12 months, up from 53 per cent in the previous survey. Finance chiefs expect inflation to be 3.4 per cent in a year's time, up from 3.0 per cent in the previous quarter, and they expect the Bank of England's key interest rate to be 4.0 per cent in a year, above its current level of 3.75 per cent.
Credit conditions have tightened in the eyes of boardrooms. Deloitte said the proportion of chief financial officers who described credit as costly had hit a two and a half year high.
Near-constant speculation on tax policy has clouded the backdrop for business.Debapratim De, chief economist at Deloitte UK, quoted by Reuters, 14 October 2026
On the risks facing their businesses, respondents ranked geopolitics first, with a score of 67 per cent. The prospect of further rate rises in Britain and the United States came second, at 65 per cent, up from 59 per cent.
Debapratim De, chief economist at Deloitte UK, said a decade of leadership turnovers and growing political fragmentation had shaped the mood, and that near-constant speculation on tax policy has clouded the backdrop for business.
The survey covered 66 chief financial officers, including those of 12 FTSE 100 companies and 25 FTSE 250 companies, and was conducted between 17 September and 1 October. It is watched by the Government and the Bank of England as a gauge of sentiment across British boardrooms.
For the Chancellor, the message two weeks out from the Budget is a defensive one. The firms in the survey are not planning for expansion first. They are planning to contain costs while they wait to see what happens to prices, borrowing costs and tax.
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