Geopolitical tensions leading factor in profit warnings - EY
By Abigail Townsend
Date: Tuesday 27 Jan 2026
(Sharecast News) - A record number of British firms blamed profit warnings on mounting geopolitical tensions in 2025, a report published on Tuesday showed.
According to EY, there were 240 profit warnings in 2025, with around 17% of all UK-based listed businesses issuing at least one during the year, largely unchanged on 2024's 18%. The overall figure was down on 2024's total of 274, and the lowest since 2021, when it was 203.
Outside of 2021's total - which followed a spike of 583 in 2020 - last year was the lowest number of profit warnings issued since 2010, when there were 196. However, a record 42% of the firms that did warn on profits cited policy change and geopolitical tensions as leading factors, including tariffs, the uncertainty around the autumn Budget and a rise in employer National Insurance contributions
That was up on 12% in 2024, and the highest annual proportion since the profits warning report launched in 1999.
Jo Robinson, EY-Parthenon partner and UK and Ireland financial restructuring leader, said: "The pace of UK profit warnings has slowed, but this feels more like an uneasy pause than a turning point. Many firms continue to face a challenging and uncertain backdrop.
"In the last year, we've seen businesses shift their focus from planning for a return to previous norms, to recalibrating for a global landscape of lower growth, higher costs and rapid technological disruption.
"There is no playbook for adapting to this new reality.
"Much now hinges on what comes next: a bullish recovery, where stability and falling interest rates boost confidence, or something more downbeat, marked by slow growth and heightened volatility."
The report also showed that one third of FTSE retailers warned on profits last year. There were 23 profit warnings from the retail sector, 30 from software and computer service providers and 23 across industrial support services.
EY defines a profit warning as an official statement made by a listed company stating that annual earnings will be "materially" below management or market expectations. Companies on both the main market and AIM are included in the report.
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