THE number of warnings issued by companies fell by 25 per cent during the second quarter of the year, despite rising interest rates.

KPMG Restructuring said there were 1,005 negative warnings, such as profits warnings or the announcement of redundancies or significant restructuring, during the three months to the end of June.

It said this compared with 1,349 warnings during the first three months of the year and 1,357 warnings during the second quarter of last year.

The number of warnings made by general manufacturing and engineering companies, which are seen as a barometer for the economy's condition, halved during the period to 76, down from 158 during the same months of last year.

These companies also made 41 per cent fewer warnings than during the first quarter of the year, when there were 128 negative warnings.

Philip Davidson, head of KPMG Restructuring, said: "Despite recent interest rate rises, there is a real feeling that the market is on the up.

"As the figures demonstrate, general engineering and manufacturing are showing that they may have come through the worst of their problems.''