Growth Returns to Top of Agenda for UK Corporates

Major British companies say that expansion is once more their top priority for the first time in 18 months according to a Deloitte survey, providing further evidence that the UK’s recent economic recovery is gaining momentum.

Forty per cent of chief financial officers (CFOs) polled by the professional services firm said they aim to venture into new markets or introduce new products or services over the next 12 months.

Thirty-five percent of respondents said increasing cash flow was a strong priority, making it the second most popular goal. Cost reduction came third and was cited by 29% of respondents.

“The mood among corporates has been transformed in the last year,” said Ian Stewart, chief economist at Deloitte. “This quarter’s survey reveals a broad-based optimism and a new focus on growth among the UK’s largest businesses.”

In a turnaround from six months ago, executives believe that the UK’s economic growth will boost their investment plans in the next year; more than expansion in emerging markets or in the US, Japan and Asia-Pacific, he added.

Confidence about the economy may also be affecting companies’ expectations for the first rise in Britain’s benchmark borrowing costs, Stewart said. The Bank of England (BoE) base rate was reduced to a record low of 0.5% in March 2009 and has remained unchanged ever since.

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