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(Sharecast News) - Profit warnings from UK-listed companies rose to their highest level in nearly two years during the third quarter, as rising costs, geopolitical uncertainty and weaker consumer confidence weighed on businesses, according to new research from EY-Parthenon.
A total of 65 profit warnings were issued between July and September, up from 59 in the preceding quarter and the highest number since the final quarter of 2024, when 71 were recorded, EY analysis found.
More than a third (35%) of warnings cited rising costs as a leading factor, the highest proportion since late 2022, while policy changes and geopolitical uncertainty were behind a record 54% of warnings.
This was the sixth consecutive quarter in which policy and geopolitical concerns were the biggest driver, with 38% of warnings specifically referencing the conflict in the Middle East.
Other major factors included contract cancellations or delays, cited in 38% of warnings, and weaker consumer confidence, mentioned in 20%.
EY said that 17% of all UK-listed companies had issued at least one profit warning over the past 12 months.
The household goods and home construction sector was the worst affected during the third quarter, recording eight warnings, including six from housebuilders. This brought the number of warnings issued by listed housebuilders so far in 2026 to 14, surpassing the 10 recorded during the global financial crisis in 2008.
Industrial support services and construction and materials companies each issued six warnings during the quarter.
Jo Robinson, EY-Parthenon partner and UK and Ireland financial restructuring leader, said businesses were increasingly facing structural pressures rather than a conventional economic downturn.
"Companies are also facing existential questions about their business models, as consumer behaviour evolves and AI reshapes competitive positions and routes to market," she said.
Robinson warned that the increasing frequency of policy changes was making it harder for businesses to forecast earnings and make investment decisions ahead of the Autumn Budget.