The firm surveyed 119 CFOs of FTSE 350 and other large private companies at the end of last year for its Q4 quarterly CFO report. The results show that 27% of CFOs say that they are more optimistic about the prospects for their companies, up from 16% in the previous quarter and 3% immediately after the referendum.

In addition, 22% say they are less optimistic than they were three months ago, making this the quarter the first since Q2 2015 where a net balance of CFOs were more optimistic than not.

Deloitte says this increased optimism comes despite levels of uncertainty remaining above normal. Most (89%) of CFOs say they face high levels of economic and financial uncertainty, up slightly from 88% in the previous quarter but down from 95% in the immediate aftermath of the EU referendum.

Similarly, levels of risk appetite remain muted and well below average, with 80% of CFOs saying now is not a good time to take risks onto their balance sheets.

On balance, CFOs see corporate spending decreasing in 2017, with 46% saying they expect capital spending to decrease in the next 12 months, down from 58% in Q2, while 48% expect hiring to slow, down from 83% in Q2.

Overall, CFOs remain focused on defensive balance sheet measures with 45% saying cost reduction is a strong priority for 2017 and 41% planning to increase cash flow.

The effects of Brexit remains the top concern for CFOs, rated at 62 on a scale of 0-100, up from 57 in Q3. This is followed by weak demand in the UK, tightening monetary conditions in the UK and US and weakness in the euro area.

Overall, 66% of CFOs believe that the long-term business environment will be worse if the UK leaves the EU - broadly unchanged from 65% in Q3 and 68% in Q2 – while 14% believe the business environment will be better as a result.

Ian Stewart, chief economist at Deloitte, said: ‘Buoyed by a backdrop of continued UK growth, CFOs have become markedly more positive on the outlook for their businesses and enter 2017 in better spirits than at any time in the last 18 months.

‘However, rising optimism does not represent a return to business as usual. Uncertainty in the external environment continues to keep a lid on corporate expansion. Risk appetite remains depressed and is well below average levels and corporates remain on a defensive footing, with cost reduction and building up cash as their top priorities.’

There are similar findings from Grant Thornton’s most recent quarterly global survey of 2,600 businesses in 37 economies. This found global business optimism going into 2017 now stands at 38%, up from 33% and the highest level since Q3 2015.   

However, the research shows that while UK business optimism recorded a five percentage point (pp) quarter-on-quarter increase in optimism – in line with the global average – the net 26% figure remains substantially below the 73% figure recorded this time last year (Q4 2015).

On the positive side, UK companies reported gains in profitability expectations (+four pp) and revenue increases (+one pp). More UK businesses also signalled intentions to invest more in R&D (+14pp) and plants and machinery (+eight pp) than in the previous quarter. However, exchange rate fluctuations remain a key concern for UK businesses, up +12pp from the previous quarter and +20pp from the same period last year.

Robert Hannah, chief operating officer at Grant Thornton UK, said: ‘Many UK businesses are now treating uncertainty as the only certainty, and adapting to the new norm in more prudent ways than was possibly the case earlier in the year, when Brexit and a Donald Trump presidency seemed a distant possibility. 

‘They know that Brexit is happening, they know the identity of the next US president, and with those questions answered they start the New Year in a positive state of mind. That is evident in investment and revenue expectations too.’