At first glance, 240 UK profit warnings in 2025 (the lowest total since 2021) might sound like a cause for cautious optimism. But dig beneath the surface, and the picture becomes considerably more complex.
In our latest fireside chat, Company Watch CEO Craig Evans sits down with Kirsten Tompkins, Market Analyst at EY-Parthenon and co-author of the widely followed UK Profit Warnings report, to unpack the Q4 and full-year 2025 data. Conversation is focussed on what the data signals for businesses, risk professionals and supply chain managers heading into an increasingly uncertain 2026.
About the report
EY-Parthenon has tracked UK profit warnings since 1999, giving its Q4 2025 report 25 years of historical context.
While the headline warning count fell, the proportion of listed companies affected remained stubbornly high; partly because the number of listed companies has halved since 1999. The FTSE 250 actually saw warnings rise to their highest level since 2016 (outside of the pandemic).
The sharpest shift: warnings citing policy and geopolitical uncertainty jumped from 12% to 42%. Tariffs, wage increases, NHS funding changes, and contract cancellations are all contributors — around a third of warnings referenced cancelled or deferred contracts, a direct signal of cash flow stress.
In 2026, the outlook is candid: a slower, more volatile market now looks like the most likely scenario.
What Company Watch data shows
EY-Parthenon’s report benchmarks the listed market. Company Watch data shows how those same fault lines are developing across the wider UK economy. And right now, the picture is stark.
Of the 5.7 million companies on the Company Watch database, 1.2 million are currently in our Warning Area. That’s approximately 21% of the entire population. A further 1.1 million are in insolvent positions. In the hospitality sector alone, 27% of companies sit in our Warning Area, with a County Court Judgement rate of 803 per 10,000, which is nearly double the national average of 421.
Fraud risk indicators are also elevated, with somewhere between 500,000 and 600,000 businesses now carrying warning signals in that area. As Kirsten notes, this is precisely the point in the economic cycle when fraud and failures of internal controls tend to come to light — a pattern borne out historically around 2008–2010 and consistent with what both datasets are signalling now.
The lead time between peak profit warnings and peak insolvency has historically been six to nine months, though in the current cycle, Company Watch and EY-Parthenon both expect that lag to extend to nine to twelve months or beyond, as businesses adapt (or fail to adapt) to a new cost and revenue reality.
For credit risk and supply chain professionals, the message from both datasets is consistent: scenario planning, balance sheet resilience, and a close watch on supply chain dependencies are the priorities for the months ahead.
EY-Parthenon’s report provides the benchmark view of the listed market, and Company Watch data shows how those same fault lines are developing across the wider economy. To explore the full sector breakdown and drivers, read the EY-Parthenon Q4 Profit Warnings Report.
