Labour and global tensions ‘to blame for profit warnings’

Nearly half of profit warnings over the summer were blamed on Government policies and global unrest, figures revealed.

A report by accountancy giant EY found that 65 UK-listed companies claimed profits would be lower than expected during the third quarter of the year.

Some 47 per cent of them cited ‘policy change and geopolitical uncertainty’ – the highest proportion recorded in more than 25 years of analysis. 

The findings follow a string of tax hikes announced by Rachel Reeves in her first Budget in October last year. These came into force in April, at the same time as US President Donald Trump unleashed his Liberation Day tariffs. 

Part of the problem: The findings follow a string of tax hikes announced by Rachel Reeves in her first Budget in October last year, which came into force in April

Employers are urging the Chancellor not to raise business taxes any further in next month’s Budget, though they still face Labour’s workers’ rights Bill.

The report also found that 19 per cent of profit warnings were blamed on falling consumer sentiment – the highest proportion since 2022, when inflation topped 11 per cent in the aftermath of the Covid-19 pandemic and Russian invasion of Ukraine.

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