Sixty-four UK companies released profit warnings in the third quarter

UK-listed companies say changes in government policy and global instability made them issue profit warnings, with new trade rules and taxes adding to the ￰0￱ the third quarter, of the 64 companies that released warnings, 47% pointed to policy changes and global instability as the main ￰1￱ share has surged from 17% last year to its highest point in over 25 years, based on EY-Parthenon ￰2￱ the other hand, 19% of firms blamed declining consumer confidence, the most since late 2022, 22% referenced tariff-related impacts, while a third of the total pointed to contracts or orders being delayed or ￰3￱ risk-averse consumer mood was also evidenced in recent retail sales ￰4￱ retail sales growth eased in September with cautious consumers homing in on essentials and waiting before making discretionary purchases, new figures from the British Retail Consortium (BRC) ￰5￱ retail sales increased 2.3% on year, after rising 3.1% in August and 2.5% in ￰6￱ at established stores, which exclude new openings, also fell to 2% from 2.9%.

Retailers blamed the weaker performance on stubborn inflation, uncertainty over imminent tax changes, and volatile weather conditions, all of which were undermining consumer confidence. *:pointer-events-auto scroll-mt-calc(var(--header-height)+min(200px,max(70px,20svh)))" dir="auto" data-turn-id="request-WEB:5900f6ce-fdbe-49b5-a39e-3fdc86c7bfe8-9" data-testid="conversation-turn-6" data-scroll-anchor="true" data-turn="assistant"> Research shows that one in four consumers is holding back on spending as Chancellor of the Exchequer Rachel Reeves prepares to deliver her first full budget in ￰7￱ new administration faces the challenge of balancing its goals, stimulating economic growth, advancing green investment commitments, and managing a growing public debt burden.

UK’s technology firms issued the most profit warnings in the third quarter Jo Robinson, a partner at EY-Parthenon, said lingering uncertainty among UK firms is having an impact on households as companies adapt to market changes and external threats such as cyber ￰8￱ have been feeling cost pressure since at least April, when rising national insurance, higher minimum wages, and trade tariffs began to squeeze their ￰9￱ software and computer services firms issued the most profit warnings in Q3, per ￰10￱ industry topped the list with 10 warnings, up from six in the second ￰11￱ explained that the software and computer services sector is being hit hard by contract cancellations and project ￰12￱ stated, “As service providers to a wide range of industries, technology firms remain highly exposed to broader economic slowdowns and cost-cutting.” Generative AI still serves as a double-edged sword for the sector — driving innovation and efficiency while heightening uncertainty and ￰13￱ explained that the speed of technological change is also making clients more cautious about new investments, while the rise of in-house capabilities is disrupting standard outsourcing and licensing ￰14￱ the November 26 Budget approaching, Chancellor Rachel Reeves faces the difficult task of boosting growth and fixing public finances, prompting expectations of further policy ￰15￱ is already under pressure to raise taxes to plug a £20–30 billion deficit, though such measures risk dampening consumer ￰16￱ UK’s media and construction firms also released profit warnings Consumer sentiment in the UK is still weak as households grapple with inflation, costly borrowing, job losses, and looming tax ￰17￱ spending per capita in the UK remains lower than pre-pandemic levels, the weakest showing in the G7 group of advanced nations.

Monday’s report showed profit warnings rising from 59 in the prior ￰18￱ the tech sector, the media and construction and materials industries also reported a high number of profit warnings, with six ￰19￱ retailers issued nine profit warnings, the highest total since late 2023. EY-Parthenon’s Christian Mole even said the hospitality and retail sectors are particularly vulnerable to cost increases, such as wage hikes, with many firms finding it hard to absorb ￰20￱ noted, “Companies from across consumer-facing sectors are reporting more selective spending, delayed purchases, and trading down to lower-cost options.” Don’t just read crypto ￰21￱ ￰22￱ to our newsletter.

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