Economy

UK CFOs feeling upbeat and ready to take risks

UK CFOs ready to spend more: Deloitte
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UK CFOs ready to spend more: Deloitte

U.K. corporates are ready to take risks, expand and hire, according to a Deloitte survey of CFOs, as business confidence improved for the sixth consecutive quarter.

Out of the 122 finance chiefs surveyed, including 32 from FTSE 100 companies, some 91 percent saw revenues increasing over the next 12 months, and over half said that now was a good time to rake risk onto their balance sheets -- the highest level since the survey began six years ago.

Meanwhile, over a third of those questioned said they expected U.K. corporates to increase hiring in 2014.

The mood of the CFOs reflects a growing sense of optimism about the economic recovery in Britain, which saw its unemployment rate fall faster than expected to 7.4 percent in the three months to October.

Last month the British Chamber of Commerce said economic growth in the U.K. will beat its pre-recession peak in the second half of 2014. The business lobby group upgraded its short-term gross domestic product (GDP) growth forecasts for the country, from 1.3 to 1.4 percent for 2013 and from 2.2 to 2.7 percent for 2014.

(Read more: UK's economic growth picks up in third quarter)

In a further sign of a turnaround in confidence, the CFOs said there was only a 16 percent probability that the U.K. would fall back into recession in the next two years -- down from 40 percent a year ago.

"CFOs enter 2014 in buoyant mood with a focus on expansion, investment and hiring in the year ahead," Ian Stewart, chief economist at Deloitte said in a press release. "This bodes well for the broad-based recovery policymakers hope to see in 2014."

Some 60 percent of those survey by Deloitte, however, said their business faced an "above normal level of economic and financial uncertainty" – although this was the lowest level in three years.

The finance chiefs have also regained their faith in banks, with 80 percent saying bank credit was an attractive source of funding.

"Large corporates have good access to capital and CFOs are more positive about financing their business with equity and bonds than at any time in the last six years," Stewart said.

"But in a sign that banks are lending once again CFOs rate bank lending as the most attractive form of finance for their business for the first time since 2008."

Bank of England (BoE) Governor Mark Carney also has the backing of corporate Britain. Just under half of the CFOs surveyed said the leadership of the Canadian-born BoE chief has made them more positive about the U.K.'s economic outlook.

(Read more: UK economy goes from 'zero to hero' but don't expect giveaway)

However, the majority of CFOs doubt whether the BoE can meet its 2 percent inflation target. Consumer price inflation slipped to a four-year low of 2.1 percent in November, but 53 percent of respondents said they thought inflation would rise above 2.5 percent in two years' time.

Interest rates could rise by the middle of 2015, according to 59 percent of those surveyed, while just under a quarter said a rate hike could be seen this year. Carney had previously said the bank would not consider raising the main interest rate from its current 0.5 percent until the jobless rate fell to 7 percent – but with unemployment sliding faster than expected, some expect the central bank to hike rates sooner than initially thought.

—By CNBC's Arjun Kharpal: Follow him on Twitter @ArjunKharpal

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