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Research carried out by the firm found that the number of profit warnings issued by UK listed companies increased by 11 per cent to 114 in the first quarter of 2008, compared with the same period of 2007.

The increase sees the number of profit warnings reach its highest figure since 2001.

Keith McGregor, restructuring partner at Ernst & Young, said: "Profit warnings remained above the 100 mark for the second quarter in a row, driven by the deepening impact of the credit crunch and a record number of retail warnings."

The sector issuing the highest number of profit warnings in the first quarter of 2008 were general retailers with 42 per cent listed on the FTSE Index issuing warnings in the last 12 months.

According to Andrew Wollaston, restructuring partner at Ernst & Young, it would be reasonable to expect more of the same, if not worse, for the rest of 2008.

"Consumer-facing industries will undoubtedly continue to suffer distress as the UK is weaned, perhaps abruptly, off its credit addiction," said Wollaston.

McGregor added: "Limited or more expensive access to credit will continue throughout 2008 and perhaps into 2009. Lenders’ balance sheets will not return to health overnight. This credit constraint will make the 'crunch' personal and painful for consumers."