Shipping group P&O has warned that the downturn in spending in the UK and the effects of Hurricane Katrina would hit profits at its ports business.

The company said profits would be up to 3 per cent below expectations after a 5 per cent fall in volumes at its Southampton terminal.

The ports business was also hit by the closure of New Orleans after Hurricane Katrina, although growth rates remained strong in Asia.

P&O blamed the downturn at Southampton on weakness in UK consumer spending and the loss of a shipping service at the end of 2004. But it forecast volume growth at its ports of 6 per cent for the year.

Analysts had forecast pre-tax profits of around £182m compared with £161m last year, but this was scaled back to under £180m following a trading update.

A P&O spokesman said: "The slower growth rate in the UK generally this year has meant that volumes have been lower.

"What we are seeing is the same as the situation reported on the high street in terms of consumer spending, which has been softer in the UK this year."

P&O shares fell 3 per cent or 8.5p to 304.75p following today's warning over the ports business.

Investec Securities analyst John Lawson scaled back his forecast for pre-tax profits to £170m.

"This is more than the 2 per cent to 3 per cent reduction in port operating profit, as implied by today's statement, but we are taking an even more cautious view of the short-term trends," he said.