UK businesses issued 64 profit warnings in the third quarter of 2025, with 19% citing falling consumer confidence as the main reason, according to the latest figures from EY-Pantheon.

This marks the highest percentage recorded for weak consumer confidence as the main cause of profit warnings since the fourth quarter of 2022.

In the retail sector, over half of profit warnings said falling consumer confidence was the cause.

Jo Robinson, EY-Parthenon Partner and UK&I financial restructuring leader, said: “The latest profit warnings data shows that the persistent uncertainty which has weighed heavily on UK businesses has spread to households.

“The standout trend in Q3 was the knock-on effect of weakening consumer confidence, at its highest since late-2022 when rising energy prices and the wider cost-of-living crisis were having an acute impact on consumer behaviour.

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The report also revealed retailers are facing added pressure and are delaying purchases and selectively spending ahead of the upcoming Budget.

Robinson added: “For both hospitality and retail, which employ 10% of the UK workforce, businesses have been heavily exposed to the change in National Insurance threshold levels and the National Living Wage increase, and while some have adjusted their cost base accordingly, others are struggling to absorb these increases.

“Against this more costly and unpredictable backdrop, the ability to remain adaptable and innovative and to deliver value will play a big part in helping companies to thrive.”