Nearly half of the profit warnings for FTSE-listed firms associated within the first three months of 2026 associated to coverage change and geopolitical uncertainty, a brand new research suggests. Because the US war with Iran drags on, EY-Parthenon discovered a 15% rise yr on yr in businesses suggesting this type of danger was harming their outcomes.
The quantity of profit warnings from listed firms within the UK fell to its lowest in 4 years in 2025, with 240 corporations issuing them. That meant that regardless of one other 12 months of commerce wars, geopolitical aggression and an inflation fee which stubbornly refuses to fall, there have been 34 fewer profit warnings amongst listed corporations than in 2024.
2026 has seen this development proceed, with the primary quarter seeing 55 profit warnings – a fall from the primary three months of 2025, which noticed 62. However because the yr commenced with one other barrage of shock insurance policies from the US’ second Trump administration, mounting geopolitical uncertainty suggests the image is extra difficult than it in any other case may be for FTSE corporations.
Supply: EY, Profit Warnings Q1 2026 report
Jo Robinson, EY-Parthenon monetary restructuring chief, commented, “The slower tempo of profit warnings on the finish of final yr might have continued into early 2026, however UK-listed firms now face a protracted interval of uncertainty following the battle within the Middle East. Larger prices and provide chain disruption will take time to filter by means of to earnings and order books, as prospects delay, pause, renegotiate or cut back spending, however will overlap with current enterprise challenges and amplify the pressure on earnings for some.”
A file 49% of the 55 profit warnings issued by UK-listed firms in 2026’s first quarter cited the influence of coverage change and geopolitical uncertainty as a number one issue. In accordance to EY-Parthenon, this marked the very best quarterly proportion recorded for this trigger in additional than 25 years of evaluation, and is a major enhance on the 34% of warnings to reference this cause throughout the identical interval final yr.
Robinson added, “Sustained uncertainty is probably going to embed a danger premium in uncovered markets, with strain concentrating in money‑constrained, extremely leveraged and operationally stretched businesses. As challenges mount, firms want to be consistently redefining what resilience means on this decrease‑development, increased‑price and unpredictable enterprise atmosphere.”
Supply: EY, Profit Warnings Q1 2026 report
Because the begin of the battle war on Iran on the twenty eighth of February, 42% of the 24 warnings issued by listed corporations have cited its influence. Elsewhere, the report additionally recognized rising prices as the opposite essential driver behind profit warnings within the first quarter, which was referenced in 22% of warnings, adopted by contract and order cancellations or delays, in 16%.
Due to the precarious nature of their provide chain, the FTSE sector with the very best quantity of profit warnings through the first quarter was software program and pc providers, which noticed seven warnings. At a time when corporations are coming underneath strain to display worth for the landmark quantities to be invested into AI and digital instruments over the past three years, this may bode poorly for the sector – which is dealing with mounting accusations of being over-hyped.
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