Fifty-nine profit warnings in the second quarter of 2026. The exact same number as a year ago. On paper, a market that has found its floor. In practice, a quarter where the pressure simply moved.
That is the story behind the title of the latest EY-Parthenon report, “What Lies Beneath”. The count has stopped telling us much on its own. What matters is the proportion of listed companies now warning, and where the stress has settled.
In the latest of our fireside chats, Company Watch CEO Craig Evans sits down with Kirsten Tompkins, Market Analyst at EY-Parthenon and author of the closely watched UK Profit Warnings report, to unpack what the Q2 numbers really mean for the businesses, lenders and credit teams who have to act on them.
About the report
EY-Parthenon has tracked UK profit warnings since 1999. Close to one in five listed companies has warned in six of the last seven years, a rate normally reserved for recessions, in an economy that is not in one. EY-Parthenon calls this the most relentless warning cycle in the survey’s 25-year history.
Q2 set another record for warnings citing geopolitical and policy change, at 53%. More than four in ten referenced the Middle East conflict, spread across 15 sectors. Cost warnings hit their highest level since 2022. Housebuilders issued eight warnings in the first half of the year, matching the peak of the 2008 financial crisis, and 47 since the start of 2020 against 27 in the previous 13 years combined.
In the video, Kirsten and Craig get into the hidden leverage most lenders never price in until it bites, why the housebuilding ecosystem is now dragging estate agents and suppliers into the numbers, what AI is doing to software and media earnings, and why higher education has stopped looking like a defensive sector. Kirsten also sets out the two indicators she is watching for the rest of 2026.
What Company Watch data shows
The listed market is the early warning system. The wider economy is where the damage lands.
Our own analysis of roughly 11,500 housebuilders and residential constructors in London puts 41% of them in the Company Watch warning zone, a clear increase on the year before. Add trade credit insurers starting to trim cover and exposure across the sector, and the risk is no longer confined to the builders themselves. It sits with the suppliers who can no longer get cover on them.
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 Q1 2026 Profit Warnings Report.
