The UK is experiencing its highest level of profit warnings since the end of the dotcom boom in 2001, according to figures from Ernst & Young.

The accountancy firm revealed there were 114 profit warnings in the first three months of 2008, a rise of 11% on the same period last year and the highest level for a first quarter in seven years.

"It would be reasonable to expect more of the same, if not worst, for the rest of 2008," said Ernst & Young's Andrew Wollaston.

"The credit crunch will become real and personal to borrowers this year, especially the 2m mortgage holders coming off fixed-rate deals."

The retail sector issued the highest number of profit warnings.