Big business backs staying in EU as deals are put on hold until after referendum

The referendum is considered a bigger risk for businesses than deflation or economic weakness in the eurozone.

David Sproul of Deloitte says business is suffering from uncertainty

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Support for Britain to remain in the EU is rising in the financial community, according to a survey, which revealed large companies are putting deals on hold before the June referendum.

Three-quarters of the finance chiefs who took part in the influential Deloitte survey said they would prefer the UK to stay in Europe, up from 62 per cent three months ago.

The survey quizzed 120 chief financial officers, including a fifth of finance bosses from FTSE 100 and FTSE 250 companies. The remaining 45 were from major private companies, Deloitte said.

It is the first time the quarterly survey has been conducted since Prime Minister David Cameron set 23 June as the date for the referendum. The increase in support comes a day after polls showed the “Leave” campaign had a four-point lead in a blow to the pro-EU camp.

The Deloitte survey also revealed that the referendum is considered the biggest risk facing businesses – more than deflation and economic weakness in the eurozone.

Crucially, the business environment is seen to be more challenging, with finance chiefs more concerned about uncertainty in the run-up to the referendum, which is having a knock-on effect on attitudes to risk.

Deloitte said corporate risk-appetite has dropped to a three-year low, which comes despite a rally from UK stocks in the past couple of months. Only a quarter of CFOs said now was a good time to take greater risk on their balance sheets, down from 51 per cent a year ago.

Deloitte’s UK chief executive David Sproul said results showed that business was already suffering from the referendum.

“Our survey shows declining risk appetite among CFOs, with the referendum rated as the top risk their business faces. And we have seen a marked slowdown in M&A activity as businesses put plans on hold for now,” Mr Sproul said.

“While voices on both sides of the debate argue about the potential economic impact of a “Leave” vote, the referendum appears to already be contributing to a slowdown.”

Ian Stewart, Deloitte’s chief economist, said: “A fog of uncertainty has descended on the corporate sector. Perceptions of financial and economic uncertainty are back to levels last seen in early 2013 as the euro crisis abated.

“Rising uncertainty has eroded corporate risk appetite.”

CFOs see significant benefits in UK membership, particularly in terms of helping exports, attracting investment and strengthening influence and connections, according to Deloitte.