UK-listed companies issued 59 profit warnings during Q2 2025, a 20% rise compared to the same period last year (49), according to EY-Parthenon’s latest Profit Warnings report.
The leading factor behind profit warnings during the second quarter was policy change and geopolitical uncertainty, cited in nearly half (46%) of warnings. This marked a significant increase from just 4% in Q2 2024, and the highest percentage recorded for this cause in more than 25 years of EY’s analysis.
The proportion of profit warnings to cite contract and order cancellations or delays in Q2 remained at a record 40%. One in three warnings (34%) cited tariff-related impacts, including weaker demand, supply chain disruption, and exchange-rate volatility.
Over the last 12 months, nearly a fifth (19%) of UK-listed businesses have issued at least one profit warning.
Jo Robinson, EY-Parthenon Partner and UK&I Turnaround and Restructuring Strategy Leader, said: “The latest profit warnings data reflects the scale of persistent uncertainty and how heavy it continues to weigh on UK businesses. While this uncertainty has been a recurring theme since mid-2024, it has intensified so far this year – driven largely by geopolitical tensions and policy shifts – compounding pressure on both earnings and forecasts.
“While the announcement of global tariffs has clearly played a part in amplifying uncertainty, they are just one factor among broader geopolitical and policy upheaval. These pressures are often interlinked and, combined, they are having a significant effect on companies’ confidence, decision-making and spending.
“Whether the rise in profit warnings is cyclical or structural remains to be seen, and we still expect earnings pressure to ebb and flow with the macroeconomic backdrop. As companies operate in a risk and forecasting environment that is challenging to navigate, they must adopt a measured, scenario-based approach that balances both agility and strategic clarity.”
The FTSE sectors with the highest numbers of profit warnings during Q2 2025 were Industrial Support Services – which encompasses business service providers, industrial suppliers and recruitment companies – with eight warnings issued, and Software and Computer Services with six.
FTSE Retail companies issued four profit warnings during the second quarter. However, when combined with the FTSE Personal Care, Drug and Grocery sector, which includes supermarkets, there were seven warnings from listed retailers in Q2.
Silvia Rindone, EY Partner and UK&I Retail Lead, added: “Profit warnings among listed retailers rose sharply in the second quarter, with the seven alerts more than double the three recorded during Q1.
“This spike highlights both softening consumer demand and the deeper structural headwinds facing the sector. Retailers we speak to tell us that falling sales are currently indicative of a longer-term shift, with consumers becoming more value-focused and less brand-loyal, which leaves cost-pressured retailers in a bind.
“Despite ongoing pressures, including the rise in National Insurance Contributions and the National Living Wage, alongside tariffs, investment in technology including AI remains essential. The winners will be those who get the basics right, such as range, service, and pricing, whilst continuing to build for the future with leaner models, sharper propositions and digital resilience.”
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