Big UK firms focus on cost-cutting as inflation bites, Deloitte survey shows

Oct 14 (Reuters) - Large British companies expect inflation and interest rates to rise over the next year and are focussing increasingly on cost-cutting, a survey published Deloitte showed on Wednesday, two weeks before finance minister John Healey's first budget.

Here are key findings from the quarterly survey of chief financial officers (CFOs) by Deloitte which gauges the mood across British boardrooms and is watched by the government and Bank of England.

• CFOs expect inflation to be 3.4% in a year's time, up from 3.0% in the previous quarter's survey

• They expect the Bank of England's key interest rate to be 4.0% in a year from now, above its current level of 3.75%

• Deloitte said the proportion of CFOs who described credit as costly hit a two-and-a-half-year high

• "A decade of leadership turnovers, growing political fragmentation and near-constant speculation on tax policy has clouded the backdrop for business," said Debapratim De, chief economist at Deloitte UK

• 68% of CFOs rated cost reduction as a strong priority for the next 12 months, up from 53% in the previous survey

• CFOs ranked the prospect of further rate rises in Britain and the United States as the second-biggest risk to their businesses, with a score of 65%, up from 59%

• Geopolitics stayed top at 67%• The survey of 66 CFOs, including those of 12 FTSE 100 and 25 FTSE 250 companies, was conducted between September 17 and October 1

(Reporting by Andy BruceEditing by William Schomberg)