Profit warnings from UK-listed companies have risen to their highest level in almost two years, underscoring mounting pressure on businesses ahead of the government’s autumn Budget.

Research from EY found that 65 UK-listed companies issued profit warnings in the three months to the end of September, up from 59 in the previous quarter. The figure was the highest since the final quarter of 2024, when 71 warnings were recorded.

Policy uncertainty weighs on companies

EY said policy change and geopolitical uncertainty were linked to 54% of warnings in the latest quarter. The conflict in the Middle East was specifically cited in 38% of cases, while 35% referred to rising costs.

The findings point to a difficult operating environment for UK companies, with subdued consumer sentiment adding to pressure on margins. Almost one in five UK-listed companies—17%—has issued at least one profit warning during the past 12 months.

Budget pressure builds

The figures come less than two weeks before the autumn Budget, increasing pressure on Chancellor John Healey to avoid measures that could further raise business costs. Industry groups have urged the government to provide greater certainty and resist tax increases while companies contend with higher wage, energy and financing expenses.

The Budget is expected to be closely watched by investors and corporate leaders, with businesses seeking clarity on taxation, energy support and incentives for investment. The Financial Times reported that companies are pressing for help with rates, energy costs and the wider burden of doing business.

Warning for the wider economy

Profit warnings do not necessarily indicate an immediate collapse in earnings across the market, but they are a closely followed signal of corporate confidence. A sustained increase can lead companies to delay hiring and investment, while weaker trading expectations may affect share prices and borrowing decisions.

The latest data suggest that businesses are entering the Budget with limited room to absorb further cost increases. For ministers, the challenge will be to raise revenue while avoiding policies that deepen caution among employers and investors.