BlackRock's Plackett: More profit warnings on the way for UK

BlackRock's Richard Plackett has warned profits are set to come under severe pressure under the next six months as macro uncertainties weigh on corporates.

The start of the third quarter earnings season has been followed closely by investors for indicators whether a summer of fears over global growth and eurozone debt have impacted on profits. The manager of the £1.3bn UK Special Situations fund sounded a cautious note: “Clearly the environment is very uncertain. There will be a lot more profit warnings and downgrades around over the next six months than over the past two years.” Plackett noted profit warnings tended to lag market rallies and pointed to the higher yields in equities than bonds as a positive signal for the asset class. Ho...