Profit warnings fall in Q4

A report by accountancy firm Ernst & Young has found that the number of profit warnings fell by 37% (a six-year low) in the final quarter of 2009.

A fall in profit warnings was unexpected since the recession led to many firms experiencing a slump in profits.

However, Ernst & Young said firms should brace themselves for “a bumpy recovery”.

While the economy has improved quicker than expected, the group said “2010 is when we start paying [for the recovery]“.

The UK economy, which has now contracted for six consecutive quarters, has been lagging behind other economies and is now the last major economy that is still in recession.

Official figures due tomorrow will confirm whether the economy saw positive growth in the fourth quarter.

However, should the economy have exited recession in the fourth quarter, leading business groups are warning of a slow recovery. Some are concerned of a ‘double-dip’.

Keith McGregor, restructuring partner at Ernst & Young said: “Growth in the first part of the year could sit in contrast with economic stagnation or even a second dip later on.”

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