British businesses are facing a challenging economic outlook, with a record number of profit warnings issued in 2024. Rising costs, contract delays, and cautious consumer spending are contributing to the pressure on corporate profits. The Confederation of British Industry (CBI) warns of continued economic weakness and potential job losses.
Rising costs helped fuel a swathe of profit warnings from London-listed firms in 2024, new data showed on Monday.
Last year, 274 profit warnings were issued, according to the report, with 71 issued in the fourth quarter. Contract and order delays or cancellations — cited in 34% of 2024's profit warnings — were the biggest source of pressure on corporate profits, the data showed. Meanwhile, increasing costs were behind one in five of the profit warnings issued throughout the year, according to EY researchers.
On Monday, Morgan Stanley downgraded its 2025 growth outlook for the U.K. from 1.3% to 0.9%, citing emerging labor market weakness and non-essential business spend cuts. "We see risks as tilted heavily to the downside," the investment bank's analysts said.published Monday, the Confederation of British Industry — which represents 170,000 U.K. firms — said the U.K.
" has resulted in businesses reviewing budgets at short notice and calibrating their response to the measures: for example, raising prices to pass on additional costs to clients, trimming investment plans and cutting headcount to reduce expenses," the industry body said.that she was "fighting every single day in our mission to kick start the economy … that includes avenues that others have shied away from.
Many business leaders, myself included, have been looking at the U.S. with envy as their economy is projected to grow this year, whilst we are seeing growth." has belatedly woken up to the fact that they need to send a positive message on the outlook, but this looks to be a case of trying to shut the gate after the horse has bolted, and requires actions rather than words, though the budget position does not give them much room for manoeuvre," he said in emailed comments.
"In our conversations with clients across the U.K., many organizations are not looking to hire, and may even reduce their headcount," he said via email. "Many business leaders, myself included, have been looking at the U.S. with envy as their economy is projected to grow this year, whilst we are seeing growth."
ECONOMY PROFITWARNINGS INFLATION COSTS HIRING
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