Future Retirement Success
  • Politics
  • Business
  • Investing
  • Stocks
  • Politics
  • Business
  • Investing
  • Stocks

Future Retirement Success

Business

High cost of borrowing puts firms on their guard

by October 17, 2022
October 17, 2022
High cost of borrowing puts firms on their guard

Credit is at its most expensive in more than a decade, finance chiefs have said as they forecast that revenues will fall over the next year.

The cost of borrowing money has reached its highest level since 2010, according to a survey of 87 chief financial officers (CFOs) by Deloitte, the management consultancy.

Forecasts have become significantly more pessimistic about the cost of finance since the government’s mini-budget at the end of last month.

Seventy-seven per cent of finance chiefs rated the level of economic and financial uncertainty as high or very high, up from 61 per cent in the previous quarter and its highest level since the start of the pandemic. CFOs are now predicting there is a 78 per cent chance that Britain will fall into a recession within the next year.

More than half said that their priority was now reducing costs, which has led to a reduced focus on strategies to grow their business.

Fixty-six per cent said that credit was costly, while 39 per cent said that it was not easily available. As a result, taking on debt through bank borrowing or issuing bonds has become much less attractive for companies over the past year. CFOs now prefer equity, or selling shares, as a source of finance, a trend last seen during the credit crunch that followed the global financial crisis of 2008.

The cost of borrowing across the world’s biggest economies has increased over the past year in response to a sharp rise in inflation fuelled by the high price of wholesale energy. The Bank of England, which was the first of the major central banks to start raising rates last December, has implemented six back-to-back rate rises in as many meetings, taking the official interest rate from 0.1 per cent to 2.25 per cent. Interest rates are expected to rise again next month, with financial markets pricing in a one percentage point increase to 3.25 per cent.

Ian Stewart, chief economist at Deloitte, said: “A 12-year period of easy credit conditions is drawing to an end. Corporates are seeing a reset in the cost and availability of credit. Not since the credit crunch have CFOs rated debt — whether that’s bank borrowing or corporate bonds — as being less attractive as a source of finance for their businesses than they do today.”

Read more:
High cost of borrowing puts firms on their guard

0
FacebookTwitterGoogle +Pinterest
previous post
Covid gains fade for small investors
next post
Recession to last until the summer

You may also like

What SMEs need from the Government in the...

March 27, 2024

New Report Sheds Light on Pregnancy and Maternity...

September 4, 2023

Surge Pricing Strategy to Hit Legoland Visitors

March 26, 2024

Secrets of Success: James Constantinou CEO and Founder...

July 18, 2024

Brexit checks on fresh food from EU delayed...

August 3, 2023

Government’s Natwest Sale Raises Concerns, FTSE 250 Chief...

May 3, 2024

Reviewpad raises €1M to streamline code reviews with...

April 27, 2023

Ed Sheeran facing a second copyright lawsuit

September 30, 2022

Optimizing public transport with intelligent technology

November 29, 2023

British recorded music exports defy increasing global competition...

July 6, 2023

    Get free access to all of the retirement secrets and income strategies from our experts! or Join The Exclusive Subscription Today And Get the Premium Articles Acess for Free

    By opting in you agree to receive emails from us and our affiliates. Your information is secure and your privacy is protected.

    Recent Posts

    • Trump ally stands firm against ‘big, beautiful bill’ despite pressure: ‘It’ll completely backfire’

      June 8, 2025
    • Rubio condemns assassination attempt on Colombian presidential candidate Miguel Uribe

      June 8, 2025
    • Obama WH physician says Biden doc should have performed cognitive test

      June 8, 2025
    • Trump warns of ‘serious consequences’ if Elon Musk funds Democrats

      June 7, 2025
    • Musk jokes about reconsidering stance on Big Beautiful Bill after Schiff’s praise

      June 7, 2025
    • Musk deletes explosive posts about Trump and Epstein files

      June 7, 2025

    Categories

    • Business (8,152)
    • Investing (2,019)
    • Politics (15,571)
    • Stocks (3,136)
    • About us
    • Privacy Policy
    • Terms & Conditions

    Disclaimer: futureretirementsuccess.com, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

    Copyright © 2025 futureretirementsuccess.com | All Rights Reserved