UK chief financial officers (CFOs) see the break – up of the European single currency as the greatest threat to their businesses in 2012, a survey from the accountancy firm Deloitte showed on Tuesday.

On the whole UK corporates were unimpressed by the response of European politicians and policymakers to the euro zone debt crisis. On average, finance chiefs saw a high probability of at least one member state leaving the currency union and said they believed a collapse of the euro would have its most severe effects on UK business through financial channels – by causing a new credit crunch and by driving major swings in asset prices and exchange ratesThe quarterly survey revealed CFOs believe there is a 37 percent chance that one or more members of the euro zone could leave before the end of the year, while 54 percent have priced in a double – dip recession occurring in the UK as a result of European instability this year.

One CFO surveyed by Deloitte  said the biggest risk he saw was a “Euro zone collapse sparking a second credit crunch”.

On balance CFOs said they expected corporate hiring, investment and discretionary spending to contract in 2012, with 87 percent telling Deloitte they saw now as a bad time to be taking additional risk onto their balance sheet.

The survey also found that 70 percent of financial chiefs expected corporate margins to decline in 2012.

The major priorities for large firms in 2012 were reducing costs and increasing cash flow, compared to the beginning of last year where companies were initially focused on expanding into new markets.

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