UK profit warnings fall to seven-year low

The number of UK-listed companies issuing profit warnings fell to the lowest level in about seven years during the second quarter.

Just 45 firms warned profits would be lower than expected from April to June, according to Ernst & Young, compared with 53 in the first quarter of the year - the BBC reports. It was the first time this number had fallen below 50 since 2003.

However, E&Y says this figure is likely to rise due to the recently-announced public spending cuts.

"UK plc could be in for another rough ride," Keith McGregor, restructuring partner at E&Y, says.

"A number of companies have already cautioned that they expect much tougher times ahead when further fiscal tightening reins in public sector and consumer spending."

Of the 45 warnings, six were from businesses which have contracts subject to cancellation or delay in the early stages of UK Government spending cuts.

Ernst & Young said this was a theme "set to figure prominently in the year ahead".