Britain’s biggest companies adopted their most defensive stance since early 2020 in the run-up US President Donald Trump’s April 2 tariff announcements and focused on boosting cashflow, cutting costs and reducing borrowing, a survey showed on Monday.

Deloitte’s quarterly survey of chief financial officers at major British firms, conducted March 18-31, found their optimism about their firms’ financial prospects was still higher than after Russia’s full-scale invasion of Ukraine and the start of the COVID-19 pandemic.

But “defensive strategies” had gained ground sharply at the expense of a more growth-oriented approach, Deloitte said.

“Given widespread speculation over the scale and scope of US tariff rises during the survey period, it is unsurprising that CFOs reported elevated levels of uncertainty,” Amanda Tickel, head of tax and trade policy at Deloitte UK, said.

Some 63 per cent of CFOs ranked cost-cutting as a top priority, up from 52 per cent three months earlier and the second-highest level on record. Introducing new products or expanding into fresh markets was a priority for 20 per cent, down from 25 per cent before.

Businesses said they expected to reduce hiring by the most since the third quarter of 2020 and for wage growth to slow to 3 per cent over the next 12 months.

“Large UK businesses are bracing for turbulence,” Deloitte said.

Despite these measures, profit margins were expected to fall as costs looked set to rise faster than revenue over the coming year, due to a big rise in payroll taxes that took effect this month as well as a near-7 per cent rise in the minimum wage.

Last month, the government’s budget forecasters halved their economic growth projection for 2025 to 1 per cent, having previously expected a boost from higher public spending after a lacklustre 2024.

The Deloitte survey was based on responses from 67 CFOs at major businesses, including 42 UK-listed companies which account for 18 per cent of Britain’s stock market capitalisation.