UK IT companies issued fewer profit warnings in the second quarter than in the first three months of the year, according to accountancy firm Ernst & Young, indicating the market may be settling into the current economic climate. Software and IT services suppliers posted nine warnings this quarter, down from 13 in the first quarter and 15 in the same period last year.

James Bennet, technology director at Ernst & Young, warned that despite the figures the tech market was not immune to the current financial gloom and the sector remained a challenging one.

“While the reduction in the number of profit warnings is certainly a positive improvement, this should not take away the challenging market conditions that technology firms are facing at the moment; some of the most difficult in the last five years,” he says.