A VAST majority of chief financial officers (CFOs) expect Brexit to adversely affect the long-term business environment, according to a new survey.

The latest second-quarter CFO Survey from business group Deloitte shows 83% of CFOs expect the long-term business environment to deteriorate as a result of the UK leaving the EU – the highest reading since the referendum in June 2016.

Meanwhile, the percentage of CFOs who think now is a good time to take a greater risk on to their balance sheets has dropped to 4%, the lowest since the failure of Lehman Brothers in 2008.

Ian Stewart, chief economist at Deloitte, said Brexit was inhibiting corporate spending: “Events in the last three years, and recent news suggesting the economy shrank in the second quarter, have added to worries about the impact of Brexit.

“This is not solely a question of the long-term outlook. Brexit has not happened, but it is acting as a drag on corporate sentiment and spending. Almost two-thirds (62%) of CFOs expect to reduce hiring in the next three years as a result of Brexit and almost half (47%) expect to reduce capital spending, suggesting a cautious approach from businesses.

“Ironically, risk appetite in the corporate sector has slumped just as it has taken off in the equity market.

“Measures of financial market volatility have declined, even though a majority of CFOs rate uncertainty as being at high or very high levels.”

The survey said that while CFOs were battening down the hatches, investor confidence has surged, with the FTSE breaching 7600 in July.

“Equity valuations imply that investors believe central banks will save the day but the downbeat mood of UK CFOs suggests corporates are less sanguine,” said Stewart.

Richard Houston, senior partner and chief executive of Deloitte North and South Europe, added: “Companies are looking for more certainty around our country’s economic future, as they prepare themselves for a post-Brexit environment.”