The 2011 second quarter Deloitte UK Chief Financial Officer Survey shows that the decline in business optimism seen in the first quarter has accelerated with CFO sentiment falling at the fastest rate since the failure of Lehman Brothers in September 2008.

CFO optimism measure has dropped to its lowest level since 2009, a time when the UK economy was in recession. Confidence that the recovery can be sustained has also taken a knock. On average UK CFOs see a 33 per cent chance of a double dip.

This mood of caution is reflected in a shift in balance sheet strategies employed by CFOs. They are putting more emphasis on cost control and increasing cash flow than at any time in the last year.

The results of the survey come after data from the Office for National Statistics suggested that the UK economy slowed more than expected in the second quarter. Industrial production in May was 0.8 per cent weaker than in the corresponding month of 2010, and slumped 1.5 per cent in the three months through May from the previous three months, the ONS said.

The Deloitte UK survey gathered views from 131 CFOs, including the CFOs of 34 FTSE 100 and 44 FTSE 250 companies. The rest were CFOs of other UK listed companies, large private companies and U.K. subsidiaries of major companies listed overseas.