Number of firms issuing profit warnings falls - but there may be worse to come

Profit warnings in three months to June plunge 40%, but analysts say firms are just meeting already low expectations

The number of UK companies issuing profit warnings fell sharply in the second quarter, but experts warned there could be worse to come.

According to advisory group EY, quoted companies issued 45 warnings in the three months to June, a 40% fall on the previous quarter and a third lower than this time last year. This is the biggest quarterly percentage drop since the second quarter of 2009. A stronger-than-expected global economic backdrop and falling forecasts have combined to significantly lower warnings, according to the report.