Profit warnings from companies on the London Stock Exchange climbed to their highest level in almost two years in the last quarter, according to research by the advisory firm EY. Some 65 quoted businesses issued downgrades in the three months to the end of September, up from 59 in the previous quarter.
Key points
- Warnings climb — 65 listed firms issued profit warnings in the quarter, the most since 71 were recorded in late 2024.
- Housebuilders under strain — the sector has already put out more warnings this year than during the 2008 financial crisis.
- Costs cited — 35% of warnings named rising costs as a leading factor, while 54% pointed to geopolitical instability and policy shifts.
The figure is the largest since the final quarter of 2024, when 71 warnings were logged, and arrives before John Healey delivers his first Budget as Chancellor. He is expected to focus on help for smaller private-sector firms such as pubs and restaurants, possibly including an increase in the business rates threshold from £12,000 to £18,000.
Housebuilders have already issued more warnings in 2025 than they did during the 2008 financial crisis. Geopolitical instability and policy changes were the most common drivers, appearing in 54% of cases, while 38% cited the effects of the continuing conflict in the Middle East. Rising costs featured in 35% of warnings, and 17% of quoted companies have issued at least one warning in the past year.
“The latest figures show the variety of structural changes and challenges that companies are currently navigating,” said Jo Robinson, EY-Parthenon partner and UK&I financial restructuring leader.
She added that the economy no longer follows the demand-led pattern familiar for much of the post-war period, with supply-side problems such as shortages of materials and labour, energy shocks, tariffs and wider geopolitical disruption becoming far more important since the pandemic.
What it means in practice
For most households this is a warning about the mood of the companies they work for and buy from, rather than an immediate change to their own finances. Firms under pressure tend to slow hiring, delay investment and put up prices where they can, so job security and bills are the areas to watch.
- Business rates — if the threshold rises as expected, many small pubs and shops would pay less; check your bill after the Budget.
- Housebuilding — more warnings from builders point to a cautious market, so buyers and sellers should allow extra time for deals.
- Jobs — watch for restructuring announcements at listed firms, which often follow a run of profit warnings.
