Diageo and British American tobacco are the latest UK-listed multinationals to warn that the strength of the pound is hurting their profits.

Spirits giant Diageo reported a 7% drop in full-year earnings to 95.5p per share after the pound’s strength against emerging market currencies, particularly in Asia, hit earnings.

BAT reported a 10% drop in first-half headline revenues to £6.8bn, despite a sales rise of 3% on a constant currency basis. Exchange rates hit revenues in key emerging markets, such as Russia, Mexico and Indonesia, leading to a 9% drop in first-half profits.

The impact of currency fluctuation has also been cited in the past two weeks by SABMiller, Reckitt Benckiser, GSK, Hilton Food Group and Compass Group. The pound has risen by about 12% against the dollar in the past year, reaching its highest level for six years earlier in July.

EY this week found UK profit warnings were at their highest level since 2011, with over a fifth related to currency movements. The percentage of FTSE consumer goods firms issuing warnings almost doubled, rising from 9% during the first half of 2013 to 16% in the first half of 2014.

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