UK Business Briefing: Profit Warnings Surge as Credit Card Rules Disrupt Travel

Profit warnings hit two-year high as Middle East conflict bites

UK-listed companies issued 65 profit warnings in the three months to September, the highest quarterly total since 2022, according to EY-Parthenon. The surge comes as businesses grapple with rising costs driven by the war in the Middle East, just weeks before Chancellor John Healey’s first Budget.

The consultancy’s latest analysis shows that nearly a third of warnings cited geopolitical tensions as a key factor, with manufacturers and retailers particularly exposed to supply chain disruptions and energy price volatility. "The war in Gaza and its regional spillovers have added another layer of uncertainty to an already fragile economic recovery," said EY’s UK chair, Hywel Ball. "Companies are now facing a perfect storm of higher input costs, weaker consumer demand and tighter credit conditions."

The data underscores the challenges facing Healey as he prepares to deliver his tax and spending plans on October 30. With inflation still above the Bank of England’s 2% target and growth stagnating, businesses are calling for measures to ease the cost burden, including tax relief for capital investment and further support for energy-intensive sectors.

Credit card rules disrupt car hire for British travellers

A growing number of British holidaymakers are being turned away at car hire desks abroad due to strict credit card requirements, leaving families stranded and out of pocket. The issue has escalated in recent months, with companies like Enterprise Rent-A-Car enforcing policies that exclude cards from online-only banks, such as First Direct and Monzo.

One traveller, who booked a car for a family holiday in France, was refused the vehicle at Carcassonne airport because her Visa card was issued by First Direct. "The desk told me they don’t accept cards from online banks," she said. "I had to scramble to find another car at the last minute, which cost me an extra £200."

The problem stems from car hire companies’ risk assessment policies, which often require credit cards (not debit cards) from traditional banks with physical branches. Online-only banks, while increasingly popular in the UK, are frequently flagged as higher-risk due to their lack of in-person verification processes.

Consumer groups are calling for clearer communication from car hire firms about their payment policies. "Many travellers assume that any Visa or Mastercard will be accepted, but that’s not the case," said Rocio Concha, director of policy at Which?. "Companies need to be upfront about their requirements at the booking stage to avoid these stressful situations."

The issue has also raised questions about whether the UK’s financial regulators should intervene to standardise payment rules across the industry. The Financial Conduct Authority (FCA) has not yet commented on the matter, but consumer advocates argue that the current system disproportionately affects younger and lower-income travellers, who are more likely to use digital banks.

Hotels and beauty spots crack down on influencers

From the French Riviera to the Scottish Highlands, hotels and tourist attractions are imposing restrictions on photography and social media content creation, citing overcrowding and disruption to other guests. The backlash against influencers has led to outright bans, time restrictions and even fees for professional photoshoots.

The five-star Hotel du Cap-Eden-Roc in Antibes, a favourite of celebrities and luxury travellers, now requires prior permission for any photoshoots. "We’ve had instances where influencers have taken over our pool area for hours, blocking access for other guests," a spokesperson said. "Our priority is to ensure a peaceful experience for all our visitors."

Similar measures have been introduced at other high-profile locations, including the Cliffs of Moher in Ireland and the Roman Baths in Bath. Some sites have gone further, designating specific "no-photo zones" or charging fees for commercial filming.

The trend reflects broader tensions between tourism and the rise of social media-driven travel. While influencers can drive visitor numbers, their presence often leads to overcrowding, environmental damage and conflicts with local communities. "It’s a double-edged sword," said a spokesperson for VisitBritain. "On one hand, influencers can showcase destinations to a global audience. On the other, their activities can detract from the experience for other visitors."

The debate has also reignited discussions about the ethics of influencer marketing, with critics arguing that many content creators prioritise aesthetics over authenticity. "There’s a growing fatigue among travellers who just want to enjoy a place without feeling like they’re in a photoshoot," said travel journalist Simon Calder.

What businesses need to watch

1. Budget pressures: With Healey’s first Budget looming, businesses will be watching for measures to ease cost pressures, particularly in energy-intensive sectors. The Chancellor has signalled a focus on "fair taxation," but details remain scarce.
2. Geopolitical risks: The Middle East conflict continues to disrupt supply chains, with companies in manufacturing, retail and logistics most exposed. Firms are advised to review their contingency plans for further disruptions.
3. Consumer spending: While profit warnings are rising, some sectors, such as travel and hospitality, are seeing resilience. However, discretionary spending remains under pressure, particularly among lower-income households.
4. Regulatory scrutiny: The FCA is expected to publish new guidance on payment rules for car hire companies in early 2027. Businesses in the travel sector should prepare for potential changes to consumer protection standards.
5. Social media backlash: Hotels and tourist attractions are increasingly wary of influencer-driven overcrowding. Companies in the hospitality sector may need to revisit their policies on photography and content creation to balance marketing opportunities with guest experience.