Credit crunch getting even worse say FDs

Finance directors say credit is more expensive and harder to secure and
predict the credit crunch is likely to worsen, according to a survey from
Deloitte published today.

Nearly one year after the credit crisis rocked global markets three-quarters
(77%) of 83 chief financial officers questioned in the quarterly survey, say
credit is hard to secure, up from 63% in March and 48% in September last year.

89% of CFOs say credit is costly, up sharply from 72% in March and 59% last
September. Only 1% believe credit is still cheap.

69% UK CFOs think credit conditions have deteriorated in the last three
months and two thirds 66% disagree with the view of US Treasury Secretary, Henry
Paulson, that the ‘worst of the credit crunch is likely to be behind us’.

CFOs are also less confident than the City about prospects for corporate
earnings, with 56% believing that corporate earnings in 2008 will grow more
slowly than the average 5.0% growth rate expected by City analysts. Only 6%
expect faster growth.

Margaret Ewing, Deloitte partner and vice chairman, said: “The squeeze on
liquidity is increasingly transmitting itself to the corporate sector through a
reduced supply and rising cost of credit.

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