The managements of Britain’s biggest companies are losing confidence as they find capital investment and employment retention becoming riskier due to the unabated financial crisis which has threatened the global economy.

According to the accounting company Deloitte, the optimism levels of the finance directors of big companies about the financial outlook fell at the fastest rate during the third quarter of the current year. The survey revealed that most companies are planning to cut investments in business and reduce employee strength amid credit crunch and rising costs. Most of the finance directors were found favouring drastic cuts in the dividends.

The survey pointed out pessimism among respondents towards the possibility of improvements in credit conditions until the second half of 2009. A large number of companies were thinking to move their corporate base to cheaper tax regimes outside the UK in order to minimise costs.

According to Margaret Ewing, partner and vice chairman of Deloitte, financial officers are gearing up for a longer period of distress in credit markets, by initiating measures such as cash preservation and cost-cuts.
Another survey pointed out that sectors other than financial services were also facing slump in confidence. Activities in eastern England, Wales, the South-east and North-east and West Midlands had biggest fall in business for the 10th consecutive month, with exception of London which recorded modest growth.

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