UK firms less likely to borrow than at any time since the financial crisis

Major UK companies are now less willing to borrow since the 2008 financial crisis, a survey of directors has found.

With barely a quarter of FTSE 100 and FTSE 250 companies expecting to increase borrowing next year, demand for loans among chief financial officers is waning.

A quarterly survey by accountancy firm Deloitte found that CFOs are now more reluctant to borrow from banks or issue loans than in 2008. The Bank of England has raised interest rates to 3.5%, almost 70% of them have now called into question the credit rate. was expensive, and nearly half said it was difficult to get a new loan.

Despite a turbulent year of supply chain disruption on top of rising inflation and rising interest rates, not all sentiment among businesses – including more than 50 UK-listed companies – was negative.

Deloitte found that the perception of external risks to businesses, particularly inflation, had eased since peaking earlier this year. A rise in energy prices since Russia’s invasion of Ukraine, as well as disruptions to supply chains, labor shortages and even higher interest rates, have brought little relief.

Only one in 10 CFOs said they expected significant supply disruptions by 2024 – the most positive result for 18 months. Most expected inflation to fall sharply to just over 5% a year.

Ian Stewart, Chief Economist at Deloitte, said: “The most aggressive tightening of monetary policy in more than 30 years calls for a reshaping of corporate attitudes to debt. Debt as a source is not considered less attractive.

“When interest rates were at very low levels, debt finance easily eclipsed equity as a source of finance. CFOs now view them roughly at par.

Although inflation has risen in Britain over the past two years to rates not seen for decades, Stewart said the tide was turning with a concomitant decline in concerns over energy supply and prices.

He added: “CFOs’ inflation risk perception has declined from its October peak as supply shortages, hiring difficulties and inflationary expectations have eroded.”


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