Optimism is high in the U.K.
Shops and pubs have opened to throngs of pandemic-weary customers, stock market IPOs are looking healthy, and company-level finance managers are predicting a rebound in profits.
Much of the enthusiasm is down to the successful rollout of vaccines. About 32 million people in the U.K., around half the population, have received at least one dose of a coronavirus vaccine, and businesses across the country are counting on pent-up demand arising from the pandemic-induced lull.
A report from Deloitte that surveyed U.K.-based CFOs found that optimism was at levels unseen since before the 2008 financial crisis, and expectations for hiring and business investment were at the highest they had been in six years.
Respondents anticipated a recovery in profits over the next year, with around 46% of CFOs rating the level of economic uncertainty as high or very high, down from 71% the previous quarter.
“We are seeing a turbocharged surge in business optimism,” Ian Stewart, chief economist at Deloitte, said in a statement. “Having come through the deepest downturn in 300 years, U.K. Businesses are firmly focused on growth. Pent-up business and consumer demand are set to power a strong profits recovery, one already anticipated by the surge in equity markets since February,” he added.
That sentiment also reflects an end to the disruptions caused by Brexit. The Deloitte poll found that only around 10% of companies had experienced significant or severe disruption because of Brexit, and the country’s divorce from the EU has dropped to eighth place on the CFOs’ worry list, down from the first- or second-place position it has occupied since the 2016 referendum.
Meanwhile, EY reported that the London Stock Exchange registered its best start to the year for company floats in more than decade, with high-profile IPO listings and a number of smaller firms on the Alternative Investment Market (AIM) making the start of 2021 a boom quarter.
Since the beginning of the year, 20 IPOs on LSE’s main and alternative markets have raised £5.6 billion ($7.7 billion), in stark contrast to the £615 million ($849 million) raised in the corresponding period of 2020.
Darktrace, a cybersecurity company, today announced plans for an IPO on the London Stock Exchange. The float is expected to value the company at around £3 billion ($4.1 billion).
On the U.K. High street, footfall shot up on Monday as the government rolled back restrictions. According to data from retail data provider Springboard, by 10 a.m. U.K. Time, footfall jumped 218% from the previous week. But despite the rebound, footfall was down 36% from two years ago. Nonessential shops and pubs were allowed to open to customers this morning, having languished under lockdown for most of the period since March 2020.