Almost half of profit warnings from UK-listed companies cite policy and geopolitical uncertainty

• A record 49% of the 55 profit warnings from UK-listed businesses in Q1 2026 cited policy change and geopolitical uncertainty as a leading factor – significantly higher than the proportion during the same period last year (34%)
• Since the start of the conflict in the Middle East, more than two-fifths (42%) of warnings issued by listed firms have referenced its impact
• The FTSE sectors with the highest number of profit warnings in Q1 were Software and Computer Services (seven), Industrial Support Services and Travel and Leisure (both five) – marking the travel sector’s joint-highest quarterly total since Q3 2022 (nine)
• Almost a fifth (19%) of all UK-listed businesses have issued at least one warning in the last 12 months

Almost half (49%) of the 55 profit warnings issued by UK-listed companies in Q1 2026 cited the impact of policy change and geopolitical uncertainty as a leading factor, according to EY-Parthenon’s latest Profit Warnings report. This marked the highest quarterly proportion recorded for this cause in more than 25 years of EY’s analysis and is a significant increase on the 34% of warnings to reference this reason during the same period last year.

Since the start of the conflict in the Middle East on 28 February, more than two in five (42%) of the 24 warnings issued by listed firms have cited its impact.

The report identified rising costs as the other main driver behind profit warnings in the first quarter, which was referenced in more than a fifth (22%) of warnings, followed by contract and order cancellations or delays (16%).

Nearly a fifth (19%) of all UK-listed businesses have issued at least one profit warning in the last 12 months.

Jo Robinson, EY-Parthenon Partner and UK&I Financial Restructuring Leader, said: “The slower pace of profit warnings at the end of last year may have continued into early 2026, but UK-listed companies now face a prolonged period of uncertainty following the conflict in the Middle East. Higher costs and supply chain disruption will take time to filter through to earnings and order books, as customers delay, pause, renegotiate or reduce spending, but will overlap with existing business challenges and amplify the strain on earnings for some.

“Sustained uncertainty is likely to embed a risk premium in exposed markets, with pressure concentrating in cash‑constrained, highly leveraged and operationally stretched businesses. As challenges mount, companies need to be constantly redefining what resilience means in this lower‑growth, higher‑cost and unpredictable business environment.”

Joint-highest level of travel sector warnings in three and a half years

The FTSE sectors with the highest number of profit warnings during the first quarter were Software and Computer Services (seven warnings), Industrial Support Services – which encompasses business service providers, industrial suppliers and recruitment companies – and Travel and Leisure (both five).

This marked the highest quarterly total of Travel and Leisure sector profit warnings since Q3 2024, which also saw five warnings issued, and the joint highest since the nine warnings recorded in Q3 2022.

Meg Wilson, EY-Parthenon Financial Restructuring Partner, added: “Historically, aviation has been among the earliest sectors to feel the impact of oil price and geopolitical disruption. Disruption to jet fuel pricing and supply, route adjustments and network reconfigurations will affect airlines differentially, and will continue to present challenges that will require careful management.

“Annual holidays remain a priority for many households and have typically been a robust area of discretionary spend. However, deteriorating consumer confidence and concerns around disposable income are increasingly shaping demand and booking patterns, as well as destination choices. Overall, the outlook remains varied, with rising operating costs continuing to put pressure on margins across much of the sector.”