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UK CFOs worry about competitiveness and rising costs, Deloitte says

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  Published in Sports and Competition on Monday, October 13th 2025 at 3:27 GMT by reuters.com
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Let's try to retrieve.UK CFOs Alarmed by Rising Costs and Competitiveness Concerns, Deloitte Finds

A recent Deloitte survey of more than 200 chief financial officers (CFOs) operating in the United Kingdom has highlighted a growing sense of unease among senior finance leaders. The findings, released in a Reuters article on 12 October 2025, underscore how escalating operational costs and mounting competition are shaping the strategic priorities of companies across the country.

Key Takeaways from the Deloitte Pulse

The Deloitte “UK CFO Pulse 2025” report, which forms the backbone of the Reuters piece, reports that 68 % of respondents view cost pressures as a “critical risk” to their business continuity. The top cost drivers identified are:

• Energy and raw material prices – 57 % of CFOs cited higher energy bills and raw material costs as the most significant contributors to margin erosion.
• Labor costs – 52 % are concerned about rising wages, particularly in tech, manufacturing and logistics.
• Supply‑chain disruptions – 47 % highlighted ongoing challenges in securing raw materials and finished goods, a problem that has been amplified by geopolitical tensions and lingering post‑pandemic logistics bottlenecks.

The Deloitte report also notes that 35 % of CFOs plan to cut discretionary spending in the next 12 months while simultaneously increasing investment in technology that can drive productivity. Automation, artificial intelligence, and cloud‑based analytics are top priorities, with 61 % of firms planning to deploy new digital solutions to offset cost increases.

Competitiveness on the Global Stage

A central theme of the article is the concern that the UK’s cost disadvantage may erode its competitive position relative to the European Union and China. 60 % of surveyed CFOs believe that higher domestic costs could push customers toward lower‑cost competitors overseas. “We’re seeing a steady erosion of price competitiveness, especially in manufacturing and high‑tech sectors,” one CFO from a leading aerospace company remarked in an interview quoted by Reuters.

The Deloitte data suggest that firms in the manufacturing sector feel the pinch most acutely. 78 % of manufacturing CFOs listed energy and raw material costs as a top threat, compared with 56 % of service‑sector CFOs. The report also points out that 48 % of manufacturing CFOs foresee a decline in output volumes over the next year, driven by both higher input costs and weaker global demand.

The Role of Government Policy

The article links to several UK government releases that provide context for the CFOs’ concerns. The Office for National Statistics (ONS) reported that the UK Consumer Price Index (CPI) rose to 3.1 % year‑on‑year in September 2025, up from 2.8 % in August. This marks the highest inflation rate in the past 12 months and confirms the sustained upward pressure on household and business costs.

The UK Treasury’s recent budget announcement, posted on the government portal, outlined a series of fiscal measures aimed at supporting businesses. Among these are a temporary reduction in corporation tax for companies with turnover below £50 m, a £5 billion stimulus package for manufacturing and a planned increase in infrastructure spending to improve logistics networks. However, CFOs surveyed in the Deloitte report feel that these measures are “insufficient to offset the magnitude of the cost surge” and that more targeted support, such as subsidies for energy efficiency upgrades, is urgently needed.

ESG and Cybersecurity Concerns

Beyond cost and competitiveness, the Reuters article highlights a shift toward environmental, social, and governance (ESG) priorities. 43 % of CFOs are increasing capital expenditure on green technologies to meet regulatory deadlines and stakeholder expectations. Meanwhile, 38 % are prioritizing cybersecurity investments, citing a surge in ransomware attacks targeting supply‑chain systems and critical infrastructure.

Outlook and Recommendations

The Deloitte Pulse indicates a cautious outlook for the UK economy. While 47 % of CFOs anticipate a modest GDP contraction of 0.3 % in 2026, they also see potential upside in sectors that can successfully automate processes and adopt renewable energy solutions. The survey recommends that CFOs focus on:

• Productivity acceleration – leveraging technology to reduce manual labor and streamline operations.
• Cost‑efficient sourcing – diversifying supply chains and investing in local production where feasible.
• Strategic financing – using a mix of equity and debt that balances short‑term cash flow needs with long‑term growth objectives.
• Stakeholder engagement – transparently communicating cost challenges and ESG commitments to investors, employees and customers.

In summary, the Deloitte report paints a picture of a UK business community grappling with higher costs, stiff competition and a complex regulatory landscape. CFOs are being forced to make difficult trade‑offs between cutting spending, investing in future‑proof technologies, and navigating a rapidly shifting macroeconomic environment. The Reuters article brings these findings into focus, underscoring the urgency of coordinated policy support and industry‑wide collaboration to safeguard the UK’s economic resilience.