Profit warnings from UK-listed companies hits two year high

UK-listed companies issued 65 profit warnings during the third quarter of 2026, up from 59 in Q2 and the highest quarterly total since Q4 2024 (71), according to EY-Parthenon’s latest Profit Warnings report.

Rising costs were cited as a leading factor in more than a third (35%) of Q3 warnings – the highest proportion recorded for this cause since Q4 2022 (41%).

The leading driver of profit warnings in Q3, for the sixth consecutive quarter, was policy change and geopolitical uncertainty (54%), the highest quarterly proportion to reference this reason in more than 25 years of EY’s analysis. Two in five warnings (38%) during the third quarter specifically cited the impact of the conflict in the Middle East.

The report identified contract and order cancellations or delays (38%) and weaker consumer confidence (20%) as the other main drivers behind Q3 warnings. Nearly a fifth (17%) of all UK-listed businesses have issued at least one profit warning in the last 12 months.

Jo Robinson, EY-Parthenon Partner and UK&I Financial Restructuring Leader, said “The latest figures show the variety of structural changes and challenges that companies are currently navigating. This is not a conventional economic cycle. For much of the post-war period, the economy followed a familiar demand-led boom-and-bust pattern but, since the pandemic, supply-side disruption including material and labour shortages, energy shocks, tariffs and wider geopolitical disruption has become far more significant. Companies are also facing existential questions about their business models, as consumer behaviour evolves and AI reshapes competitive positions and routes to market.

“With the Autumn Budget around the corner, profit warnings linked to policy change and uncertainty – once concentrated around fiscal events or elections – have become a regular feature of our data. Businesses have shown considerable resilience, but the pace of policy change is making forecasting, investment and capital allocation much harder. In today’s fiscal and financing environment, where many earnings pressures are linked to external shocks or competitive and technological disruption, boards that act early instead of waiting for conditions to improve will retain more options.”

The FTSE sector with the highest number of profit warnings during Q3 was Household Goods and Home Construction, which recorded eight warnings. This included six warnings from listed housebuilders, taking their total in 2026 so far to 14, well above the 10 issued in 2008 during the peak of the global financial crisis.

The Industrial Support Services – which encompasses business service providers, industrial suppliers and recruitment companies – and Construction and Materials sectors each issued six profit warnings in the third quarter.

Claire Gambles, EY-Parthenon Financial Restructuring Strategy Partner, said “Profit warnings citing cost and supply chain pressures have remained elevated since the pandemic and have now reached their highest level in nearly four years. Housebuilding has become the epicentre of these cost and interest rate pressures. The sector will be hoping that confirmation of the Government’s renewed support for first-time buyers will improve reservations and transaction volumes, although key details including eligibility, local price caps, developer contributions and timing are all still to be confirmed.

“The impact of higher costs is becoming increasingly widespread across service and manufacturing sectors. The cumulative stress of weaker conversion, operational pressures and industry transformation means that individually manageable issues are combining to create material earnings challenges.”