Executives at companies in continental Europe and the UK are increasingly gloomy about the prospects for 2009 and many expect a prolonged recession before a slow recovery starting in 2010. But consensus forecasts for earnings next year – compiled by industry analysts who are often briefed by companies – still point to a 10 per cent increase in profits in Europe, whereas equity strategists think there will be a 30-40 per cent fall.

“There is a big change that needs to come,” said Adrian Cattley, European equity strategist at Citigroup, who is forecasting a 10 per cent drop in earnings this year and a further 30 per cent fall next. He added there would be many more profit warnings as companies adapted to reality: “Companies take a long time to move from thinking things are good to they are bad.”

Companies from Daimler and Renault to Air France-KLM and reinsurer Hannover Re have recently issued profit warnings with analysts saying more is to come. Citi ranks the sectors with the highest risk to consensus earnings as banks, cars, technology and miners.