Profit warnings from UK-listed firms hit two-year high as Iran war raises costs

UK-listed companies issued 65 profit warnings in the three months to the end of September. EY-Parthenon said it was the highest quarterly total in two years.

Rising costs were the main factor in 35% of the warnings, while 38% specifically cited the impact of the conflict in the Middle East. Almost 17% of UK-listed companies have issued at least one warning about their financial performance in the past 12 months.

Housebuilders exceed 2008 crisis figure

The household goods and home construction sector issued the most warnings between July and September. Six listed housebuilders were among those affected, taking their total for the year to 14, compared with 10 in 2008.

Separate figures from Rightmove showed average asking prices for newly listed homes rose 1% to £371,015 in October. Prices were still down 0.1% over the year, and the property platform warned that higher mortgage rates were reducing affordability.

Mortgage costs rise by about £250 monthly

Average two-year fixed mortgage rates climbed to 5.55%, from 5.29% a month earlier and 4.25% before the US and Israel attacked Iran in February. The increase has added about £250 to average monthly payments on a new loan.

Rightmove property expert Colleen Babcock said higher rates were beginning to affect seller pricing in cheaper parts of Great Britain.

Government prepares budget measures

Chancellor John Healey is due to deliver his tax and spending statement on 28 October. He has promised households and businesses “breathing space”, while warning that the government has limited room to intervene as borrowing costs and pressure on public finances rise.

The government is preparing measures to reduce business-rates pressure on small shops, cafes, pubs and hairdressers. The threshold at which small firms begin paying business rates could rise from £12,000 to £18,000. A scheme for first-time buyers is also expected at the budget.

The Trades Union Congress has urged the chancellor to fund cost-of-living support through higher taxes on wealth and the banking sector. It said UK households had paid almost £14,000 each on average in additional mortgage, loan, energy and water costs over the past five years.