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Geopolitical Risks Top Concerns for UK Finance Leaders, Survey Indicates
A recent study reveals that finance chiefs at leading British corporations are expressing heightened unease regarding geopolitical risks, exceeding levels observed since the onset of the Ukraine conflict three years prior. This escalating apprehension among top financial officers emphasizes the growing economic uncertainty confronting businesses amidst the current global landscape. The Deloitte survey highlights that anxieties over worldwide instability were already intensifying even before former US President Donald Trump announced his ‘Liberation Day’ trade policy at the beginning of the month.
Rising Geopolitical Concerns Among CFOs
According to the Deloitte survey, sixty-seven chief financial officers (CFOs) from a spectrum of Britain’s major firms were consulted. Key issues raised included apprehensions about tariffs and other impediments to international commerce.
A significant 46 percent of respondents identified geopolitical developments as a ‘major worry’ for their respective businesses – a substantial surge from just 15 percent recorded during the same period last year.
Impact of Trade Uncertainty
Amanda Tickel, head of tax and trade policy at Deloitte UK, commented on the findings, stating, ‘Considering the widespread speculation surrounding potential US tariff hikes during the survey timeframe, it comes as no surprise that CFOs reported amplified degrees of ambiguity.’
She further noted, ‘Past episodes of uncertainty concerning future trade conditions have historically led to a sustained constriction of investment.’
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Geopolitical Risks: Instability in the global landscape was intensifying even before Donald Trump’s ‘Liberation Day’ announcement.
Business Preparedness in a Volatile Environment
‘We remain in a rapidly changing setting, and enterprises must be proactive in lessening the effects of tariffs,’ Tickel advised.
‘Currently, businesses are likely assessing the possible consequences, determining the readiness of their customs procedures, and ensuring they possess maximum adaptability in sourcing and supply chains.’
Survey Demographics
The survey encompassed CFOs from a range of companies including 14 FTSE 100 firms, 20 from the mid-cap FTSE 250 index, as well as other UK-listed entities, large privately-owned companies, and UK subsidiaries of multinational corporations.
The data collection occurred between March 18th and 31st, concluding just two days preceding Trump’s ‘Liberation Day’ announcement of tariff measures that have since sent shockwaves through global markets.
Anticipating Economic Repercussions
The data suggests that leading businesses were already preparing for considerable repercussions even prior to the US President’s escalation of the trade war.
Deloitte’s research also indicated that concerns about weakness or instability in US economic growth reached their highest point since records began in 2020.
Market Turmoil and Investor Reactions
Fears regarding the ramifications of Trump’s levies triggered a market downturn last week.
Although a 90-day suspension for most countries was declared on Wednesday, ongoing volatility has persisted as traders grapple with persistent unpredictability. The President also intensified tariffs on China – the world’s second-largest economy – prompting reciprocal measures from China.
This situation prompted investors to hastily divest American assets, causing the dollar to decline and bond yields to increase.
Hopes for Market Stability
The White House is anticipated to be hoping for more stable markets when trading recommences today.
However, adverse economic news could potentially trigger demands for a more significant reversal of policy or for intervention by the US Federal Reserve to stabilize the situation.