Full Breakdown
Declining Confidence Among UK Firms Amid Iran Conflict
4/13/2026, 11:28:38 AM
Overview of the Current Situation
Confidence among Britain's largest companies has reached its lowest point since the onset of the COVID-19 pandemic, primarily due to the ongoing conflict in Iran. According to the quarterly Deloitte survey of Chief Financial Officers (CFOs), net confidence plummeted to -57% in late March 2026, a significant drop from -13% at the end of 2025. This decline reflects heightened concerns over rising energy prices, inflation, and the prospect of increased interest rates.
Key Findings from the Deloitte CFO Survey
The Deloitte survey, conducted from March 16 to March 30, 2026, included responses from 79 CFOs, including representatives from 12 FTSE 100 companies and 29 FTSE 250 firms. The survey revealed that 61% of CFOs expressed significant concern regarding rising energy prices and inflation, which are anticipated to lead to higher interest rates. Ian Stewart, chief economist at Deloitte UK, noted that the conflict in the Middle East has reshaped business sentiment, creating a shock to CFO confidence not seen since early 2020.
Impact on Business Operations
As a direct consequence of these concerns, companies are shifting towards cost-cutting measures, with 79% of CFOs expecting a reduction in hiring over the next year, up from 55% previously. This trend indicates a significant focus on cost control and cash conservation, with many firms prioritizing these strategies to navigate the challenging economic landscape. The survey also highlighted that 68% of CFOs identified cost control as a strong priority for the upcoming year.
Local Business Perspectives
In Greater Birmingham, businesses are experiencing immediate effects from the Iran conflict, including rising fuel costs and supply chain disruptions. The British Chambers of Commerce has initiated a survey to assess the full impact of these issues on local businesses. Emily Stubbs, head of policy at Greater Birmingham Chambers of Commerce, emphasized that while the UK imports a relatively small proportion of its oil and gas from the Middle East, it remains vulnerable to global energy shocks. Local businesses, such as the Edgbaston-based restaurant Chapter, reported that the conflict has exacerbated existing challenges, including rising operational costs due to increased fuel prices and changes in employment laws.
Criticism and Opposition
Critics argue that the cumulative pressures from the Iran conflict, alongside domestic policy changes such as increases to the National Living Wage, are creating an unsustainable environment for businesses. Ann Tonks, co-owner of Chapter, expressed frustration over the compounded challenges, stating that the war has worsened an already difficult situation for the hospitality industry.
Official Statements & Responses
Deloitte's findings indicate that CFOs are increasingly focused on managing risks associated with geopolitical developments. The survey results are expected to inform key stakeholders, including the UK government and the Bank of England, about the current business climate and the challenges firms are facing.
Conclusion
The ongoing conflict in Iran has significantly impacted business confidence in the UK, leading to heightened concerns over energy prices and inflation. As companies adapt to these challenges, the focus on cost control and cash conservation is likely to shape the economic landscape in the coming months. The responses from local businesses further illustrate the widespread effects of geopolitical tensions on operational viability and economic stability.
