The number of businesses in the region that issued profit warnings between July and September has reached its highest level since 2019.

Three companies in the east have said that their profits will be lower than initially expected, a report from Ernst and Young found.

A growing number of firms, especially those that were hit hardest during the pandemic, are struggling with rising energy costs.

Stuart Wilkinson, managing partner for the east of England at Ernst and Young, said: “Rising costs, the economic after-effects of the pandemic, uncertainty, and difficulties within the supply chain are just some of the challenges businesses are facing across sectors and industries.

"Businesses’ resilience will be put to the test over the coming months as they navigate the ever-changing economic environment.

"Swift action and decision-making will be essential if they are to weather these turbulent times. As with all challenges though, opportunities remain for those who can learn how to adapt – it is these opportunities we should focus on.”

Across the UK, the number of profit warnings issued between July and September is at its highest level since 2001.

The report found that a total of 86 profit warnings were issued nationally during these three months, compared to 51 during the same period in 2021 - an increase of 69pc.

It said that 57pc of warnings cited rising costs and 23pc were due to labour market issues.

July to September also saw a 34pc rise in warnings compared to April to June 2022 when 64 were issued.

According to Ernst and Young the rise has been driven by "a significant increase in the number of warnings from consumer-facing companies, which rose almost three-fold year-on-year".

Silvia Rindone, retail lead at Ernst and Young, said that the retail sector is "facing a challenging winter" and the "UK economy is expected to be in recession until the middle of next year".

He added: "However, there are steps businesses in the sector can take to prepare.

"For example, it is critical that retailers use the breathing space provided by the energy price cap to safeguard their long-term survival.

"This means reviewing their pricing strategy and considering how and where they can pass price rises on, developing robust cash management plans and inventory visibility to avoid costly write-offs.

“Above all, retailers need to adapt to changes in consumer behaviour."