Profit warnings hit highest level since 2024 as Budget uncertainty bites

UK-listed firms have issued a record number of profit warnings, soaring to the highest level in two years, as the war in the Middle East drives up costs, according to consultancy EY-Parthenon. In the three months to the end of September, 65 UK-listed companies revealed warnings, exceeding the previous peak set during the 2008 financial crisis.

Housebuilders have issued more warnings this year than during the financial crisis. The war in the Middle East is the primary factor behind 35% of the warnings, with 38% specifically attributing it to the conflict. With less than two weeks until Chancellor John Healey's budget statement to Parliament, businesses are urging the government for emergency support to counter soaring fuel costs and energy bills.

Healey has pledged to provide households and businesses with breathing space in the October budget, but warns that limited resources will be available given the high cost of borrowing, which is at its highest level in decades. The government is also considering measures to help small businesses by increasing the threshold for business rates from £12,000 to £18,000.

Despite these efforts, house prices have fallen by 0.1% over the past year, while average two-year fixed mortgage rates have risen to 5.55%, adding about £250 to the monthly payments for new loans.