Weak consumer confidence has become an escalating concern for UK businesses, with a rising number of listed companies issuing profit warnings in the run-up to next month’s autumn Budget.
A new report from EY reveals that 64 UK-listed firms issued profit warnings in the third quarter of 2025 — one in five of which attributed the downgrade to weakening consumer sentiment. The figure marks the highest proportion of confidence-linked warnings since late 2022, when soaring energy bills and the cost-of-living crisis led households to tighten spending.
EY’s findings also point to the growing influence of external pressures. Nearly half (47%) of all profit warnings referenced macroeconomic or geopolitical uncertainty, including shifting fiscal policies, regulatory changes and ongoing global conflicts.
Among sectors, software and computer services companies issued the most warnings, followed by construction and media. The construction industry remains under severe strain, recording 3,934 insolvencies in the 12 months to August — the highest of any sector, according to the Insolvency Service. Wholesale and retail businesses, including vehicle repair firms, followed closely with 3,710 insolvencies during the same period.
Overall, corporate insolvencies in England and Wales rose by 2% year-on-year to 2,000 in September. However, company administrations — typically involving larger firms — declined by 17% to 124.
Jo Robinson, UK & Ireland restructuring leader at EY-Parthenon, said the latest data shows how economic uncertainty is increasingly filtering down to consumers. “The standout trend in the third quarter was the knock-on effect of weakening consumer confidence,” Robinson said. “Persistent uncertainty that has weighed heavily on UK businesses has now spread to households.”
She noted that the proportion of FTSE-listed companies issuing profit warnings over the past year remains in line with levels seen during periods of economic turbulence.
Christian Mole, EY-Parthenon partner and head of hospitality and leisure, added that while some businesses have adjusted to higher employer National Insurance contributions, others are “struggling to absorb” rising costs. He cited growing signs of consumers trading down, delaying purchases and becoming more selective in their spending.
“Within hospitality and leisure, casual and upscale dining operators are facing significant pressure, while more affordable pub formats are showing greater resilience,” Mole said. “As consumers become more selective, authenticity and value are increasingly driving choice.”
With the autumn Budget set for 26 November, EY’s analysts say businesses are watching closely to see how the government addresses weak growth, tax burdens and emerging risks such as cyberattacks. Robinson added that companies are continuing to adapt to “ongoing uncertainty and growing external threats” as they brace for the months ahead.
