Profit warnings hit new high

The number of profit warnings from UK listed companies in the first three months of 2008 hit the highest level for a first quarter since 2001.

According to a survey by a major financial firm, there were 114 profit warnings in the period, 11% up on the same period in 2007 and the most since the end of the ‘dotcom’ boom.

Retailers faced more warning than any other sector, as consumers cut back on spending in the current climate of mortgage worries, following the ‘credit crunch’.

Meanwhile, Shadow Chancellor George Osborne has blamed Gordon Brown for the country’s economic difficulties. In a speech to the Policy Exchange think tank he said: "At the root of the problem is the failure of the government's economic policy… [the Prime Minister has] rested his claim to competence on three pillars - stability, prudence and competitiveness.

“Instead, after a decade of worldwide growth, we have ended up with housing boom followed by bust, spending followed by debt, and a country finding it more and more difficult to compete.”

Following the recent cut in interest rates, Chancellor Alistair Darling urged the banks to pass on the cut to home-owners

"We have been supporting the system - through the Bank of England an extra £15bn has been put in to help them get through this difficult period," he said.

"We know this is a difficult time. We've got to get through it and we can get through it. What we are saying is - we are helping the banks, the banks have got to help people as well."

Despite all this, an online survey by Harris Interactive suggested that while more than a third of people in the UK expected their financial position to worsen next year, 44% said the credit crunch had so far had "no impact" on their lives.