Corporate Britain is issuing red flags at an alarming pace, as economic instability and rising trade costs begin to bite. According to the latest data from EY, UK-listed companies issued 59 profit warnings in Q2 2025. This is a 20% rise from the previous quarter and the highest quarterly total in years. The surge reflects mounting uncertainty driven by geopolitical tensions, escalating tariffs, and weakening global demand, painting a troubling picture for investors and operators alike.

Geopolitical Risk and Financial Distress

Nearly half of all profit warnings (46%) explicitly cited geopolitical instability as the reason for this uncertainty. Much of the concern stems from new US tariff measures announced by the Trump administration in April, which sparked a 24% year-on-year spike in warnings that month alone. Of those, half cited trade disruptions and tariff impacts directly, signalling growing unease among UK exporters and global-facing businesses. FTSE-listed companies such as TT Electronics and Clarksons are among those flagging performance concerns linked to US trade policy and international order volatility.

Retail, Services and Supply Chains Under Pressure

The industrial support services and retail sectors were hardest hit, issuing eight and four warnings respectively. Businesses are being squeezed from both ends: volatile global supply chains and trade policy on one side, and surging domestic costs. 

The data coincides with a worsening employment picture. UK payrolls have shrunk by over 184,000 since October 2024, with 70% of those job losses in retail and hospitality. Added to this, construction and a few other sectors already battered by inflation, shifting consumer behaviour, and spiralling energy bills.

Beyond the headline profit warnings, EY’s report also found contract cancellations and order delays at record highs, indicating a broader softening of both domestic and international demand.The surge in warnings, particularly in industries tied to trade, labour-heavy operations, and consumer spending, should serve as a heat map for potential acquisitions and off-market opportunities. To learn more about how to turn this into profit, subscribe to Administration List today.