Deloitte's Q2 CFO Survey | UK rises up the list of attractiveness for investment

Deloitte CFO Survey: UK rises up the list of attractiveness for investment

• CFOs rank the UK as the joint top location for investment, alongside India;
• Risk appetite among finance leaders has increased, with 17% believing now is a good time to take greater risk onto their balance sheets;
• UK corporates are moving away from defensive strategies for the first time in a year;
• Geopolitics continues to be rated as the top risk to business by finance leaders.

Deloitte’s latest survey of UK Chief Financial Officers shows that finance leaders see the UK as the most attractive destination when it comes to investment, alongside India, with a net¹ 13% describing it as very or somewhat attractive.

The survey – which took place between 16^th and 29^th June – is a contrast from the fourth quarter survey of 2024, when the UK came in sixth place, behind the US, India, the Middle East, emerging Europe and Japan.

Richard Houston, senior partner and chief executive of Deloitte UK, said: “These results reveal a shift in sentiment with the UK now viewed as a leading global investment destination. This renewed confidence, coupled with a rise in risk appetite, is welcome and underscores the considerable investment potential the UK offers.”

Business sentiment is more balanced

There was a slight increase in business sentiment overall among CFOs this quarter, with the index of business optimism seeing a modest increase for a second quarter to -11%, compared to -14% last quarter.

CFOs now expect inflation to decline to 2.9% by the middle of next year and expect the Bank of England to lower its base rate to 3.75% over the next 12 months, down from its current rate of 4.25%.

Risk appetite improves

This quarter, CFOs reported an uptick in risk appetite with 17% believing that it is a good time to take greater risk onto their balance sheets, compared to 12% last quarter. The survey shows a slight tilt away from defensive strategies for the first time in a year, with CFOs more likely to give priority to expansionary strategies such as introducing new products or expanding into new markets than they have been at any point since the autumn of 2023.

Nonetheless, defensive strategies remain twice as likely to be a strong priority as expansionary ones - with an expansionary strategy on average likely to be a strong priority for 19% of CFOs and a defensive strategy on average a priority for 41% of CFOs.

Geopolitics remains top risk to business

For the eighth consecutive quarter, geopolitical risk continues to be rated as the top external risk² to business. It was assigned its third highest weighted average risk rating³ since the survey first started asking the question in 2018, however the rating has marginally fallen this quarter to 71, from 74 in March.

The percentage of finance chiefs reporting that the level of external uncertainty facing their business is high or very high, has dipped from 46% last quarter to 44%. This is slightly above the long term average of 40%.

Ian Stewart, chief economist at Deloitte UK, said: “Despite conflict in the Middle East and volatility in oil prices levels of concern about geopolitical risk fell slightly in the second quarter. This may reflect an easing of concerns around trade in the light of the UK-US trade deal announced in early May.”     

Ends   

Note to editors    

¹ A number of the Deloitte CFO survey findings are presented in terms of net balances – standard practice with surveys conducted by many central banks. In the case of the attractiveness of destinations for business investment, CFOs were asked whether they thought each destination was attractive or unattractive (or neither). The net balance (net 13%) was then computed by subtracting the percentage of CFOs who thought the destination attractive from the percentage who thought the destination unattractive. Net balances can be negative or positive. In the case of attractiveness for investment, a negative reading implies a greater proportion of CFOs think the destination is unattractive than think the destination is attractive. Throughout this press release and the survey report, net percentages indicate where net balances are used to present findings.

² The 12 risk areas tracked in the survey are:    

- Rising geopolitical risks worldwide including greater protectionism

- Poor productivity/weak competitiveness in the UK economy   

- Higher energy prices or disruption to energy supplies   

- Persistent labour shortages   

- The risk of higher inflation and/or a bubble in housing and other real and financial assets    

- The prospect of further rate rises and a general tightening of monetary conditions in the UK and US   

- Long-term effects of climate change    

- Economic weakness and/or volatility in US growth   

- Medium-term supply chain disruption    

- Deflation and economic weakness in the euro area, and the possibility of a renewed euro crisis    

- Effects of Brexit/deterioration in UK-EU relations   

- Weakness and/or volatility in emerging markets   

³ Weighted average ratings on a scale of 0-100 where 0 stands for no risk and 100 stands for the highest possible risk.

About the survey     

Conducted between 16^th and 29^th June 2025, the Q2 2025 Survey is the 72^nd quarterly survey of Chief Financial Officers and Group Finance Directors of major companies in the UK.

Overall, 66 CFOs participated, including the CFOs of 10 FTSE 100 and 22 FTSE 250 companies. The rest were CFOs of other UK-listed companies, large private companies and UK subsidiaries of major companies listed overseas. The combined market value of the 37 UK-listed companies surveyed is £386 billion, or approximately 14% of the UK quoted equity market.

The Deloitte CFO Survey is the only survey of major corporate users of capital that gauges attitudes to valuations, risk and financing.    

For copies of previous CFO surveys, please see here.