UK-listed firms have issued 65 profit warnings in the three months leading up to September, marking the highest level in two years. Analysis from consultants EY-Parthenon reveals that businesses are grappling with surging costs and market uncertainty, with the ongoing conflict in the Middle East cited as a primary driver by 38% of those issuing warnings. According to with less than a fortnight before John Healey’s tax and spending statement to the Commons, the consultants EY-Parthenon, Companies quoted on the London stock market had issued 65 warnings in the three months to the end of September. Cafes, pubs and hairdressers with rising costs by using the budget to cut business rates for small companies, it emerged on Sunday that Healey is preparing to announce measures to help thousands of high street shops. It also warned that rising mortgage rates were likely to make homes less affordable in a price-sensitive market.
As the October 28 budget approaches, Chancellor John Healey faces mounting pressure to deliver economic relief.
While Healey has pledged to provide households and businesses with “breathing space,” he has cautioned that the government’s ability to intervene is constrained by the impact of the conflict on borrowing costs and public finances.
Plans reportedly under consideration include raising the threshold for small business rates from £12,000 to £18,000, a move intended to honor commitments made during Andy Burnham’s by-election campaign. According to in a development that would honour a promise made by Andy Burnham in his Makerfield byelection campaign before entering Downing Street, the planned change, first, By the Sunday Times, would result in the threshold at which small firms start paying business rates rising from £12,000 to £18,000.
The current economic environment has proven particularly difficult for the construction sector. Housebuilders have issued more warnings this year than during the 2008 financial crisis, with 14 warnings recorded so far in 2026. This trend aligns with broader shifts in the property market; while Rightmove reports a 1% rise in asking prices to £371,015 for October, property values have seen a 0.1% decline over the past 12 months. Separate figures released on Monday from the property platform Rightmove show house prices have fallen by 0.1% over the past 12 months. Including six warnings from listed housebuilders, whose 2026 total has reached 14 so far – already past the 10 in 2008, the peak of the global financial crisis, the FTSE sector issuing the most warnings from July to September was household goods and home construction. Where prices had been more resilient this year.”, we’re now seeing mortgage rate rises feed through to seller pricing in many of the cheaper parts of Great Britain.
Borrowing costs have spiked significantly, affecting both corporate investment and individual affordability. Average two-year fixed mortgage rates have climbed to 5.55%, up from 5.29% last month and 4.25% prior to the start of the conflict in February. This increase adds roughly £250 to monthly mortgage payments for new loans, a burden that property expert Colleen Babcock at Rightmove notes is beginning to weigh heavily on buyer budgets.
Rising costs were identified as the main factor for 35% of all profit warnings, while 17% of UK-listed businesses have now issued at least one warning regarding their financial performance within the last year. Jo Robinson of EY-Parthenon noted that the frequency of warnings linked to policy and geopolitical uncertainty has shifted from being tied to specific fiscal events to becoming a regular feature of the current data.
Commenting on the broader business climate, Robinson observed that while companies have demonstrated significant resilience, the rapid pace of policy shifts is complicating forecasting and capital allocation. The Trade Union Congress recently highlighted the cumulative impact on households, estimating that UK families have paid nearly £14,000 extra on average for mortgages, loans, and energy bills over the past five years.
In response to these findings, the Trades Union Congress has urged the chancellor to utilize the upcoming budget to implement a cost-of-living support package, potentially funded by increased taxation on the banking sector and wealth. Furthermore, the government is expected to unveil a support scheme for first-time homebuyers to assist those struggling to enter the property market.
