There were 59 profit warnings from April to June, a slight increase from 55 in the first quarter, the latest Profit Warnings report found.

Over half ( 53%) of those warnings referenced policy change and geopolitical uncertainty as a leading factor – the highest quarterly proportion recorded for this cause since EY began analysing profit warnings over 25 years ago, the company said.

For the research, EY-Parthenon tracks the statements from publicly listed companies to the stock exchange outlining that they will report full-year profits materially below management or market expectations.

Since the start of the conflict in the Middle East on 28th February, two in five ( 40%) of the 80 UK profit warnings issued have cited its impact.

Rising costs were the other main driver, referenced in 27% of warnings, followed by contract and order cancellations or delays ( 25%) and weaker consumer confidence ( 14%).

According to the analysis, 18% of all UK-listed businesses have issued at least one profit warning in the last 12 months.

The FTSE sector with the highest number of profit warnings during the second quarter was travel and leisure, which recorded seven warnings. 

The figures highlight that pressure is increasingly concentrated in sectors and businesses facing rising costs, cautious consumers and tighter credit conditions, according to Jo Robinson, EY-Parthenon partner and UK&I financial restructuring leader.

Robinson said: “Just as one source of pressure begins to ease, another emerges; a year ago, companies were grappling with disruption from tariffs and shifting trade policy, while the conflict in the Middle East has now triggered more than two-fifths of recent warnings.”

“Beyond geopolitical tensions, businesses face some policy uncertainty – both domestically and abroad – which is creating a source of volatility. Many companies will adapt and thrive despite this backdrop, but there is growing evidence that years of rolling disruption have eroded corporate resilience. The number of profit warnings has stabilised, but the proportion of listed companies issuing them has reached levels more typically associated with recession in six of the last seven years.”