UK profit warnings hit highest level in nearly two years as EY blames geopolitics and rising costs

Profit warnings by UK-listed companies climbed to their highest level in nearly two years in the third quarter, with advisory firm EY finding that policy uncertainty, geopolitics and rising costs drove the downgrades (Particle News).

EY’s quarterly report, published on Sunday, showed 65 UK-listed companies warned on profits in the three months to the end of September — up from 59 in the previous quarter and the highest reading since the final quarter of 2024, when 71 warnings were issued (BritBrief).

Policy change and geopolitical uncertainty were the leading cause, linked to 54% of warnings, while 38% specifically cited the conflict in the Middle East and 35% named rising costs. Almost a fifth of listed companies — 17% — have issued at least one profit warning over the past 12 months.

Housebuilders were the epicentre: six listed builders, including Vistry, Persimmon and Taylor Wimpey, issued warnings in the quarter, citing cost inflation, weaker sales and higher borrowing costs — taking the sector’s year-to-date total to 14, above the 10 recorded at the peak of the 2008 financial crisis (UK Pulse).

“Housebuilding has become the epicentre of these cost and interest rate pressures,” said Claire Gambles, EY’s financial restructuring strategy partner. EY-Parthenon partner Jo Robinson added: “This is not a conventional economic cycle.”

The warnings land ahead of John Healey’s first budget later this month — the first since Andy Burnham became prime minister. Follow Flip News’ UK profit warnings coverage.