The size of the deficit in defined benefit pension schemes dropped sharply in October, according to a report on Monday.

The total deficit in the UK’s 6,000 defined benefit funds improved by £60bn to £630bn, down from the record high of £710bn in August, said the accountancy firm PricewaterhouseCoopers. The improvement followed a recent rise in yields on gilts, or government bonds. But Raj Mody, PwC’s global head of pensions, said: “Slight improvements in gilt yields have contributed to the apparent deficit reduction, but liability measurement by gilt yields does not necessarily represent reality, given pension liabilities are mainly affected by longevity and inflation.”

PwC has called for a review of how pension deficits are repaired and how pension investment strategies are formulated. It said most funds expected to reduce their deficits within 10 years, but 15 years may be more realistic.

The rise in gilt yields, which means the value of gilts are falling, follows investor concerns about the outlook for the UK economy post-Brexit. So far it has been a mixed picture, with the economy holding up reasonably well.

But Brexit was the biggest reason for companies issuing profit warnings in the third quarter, according to consultancy group EY.

It said UK quoted companies issued 68 profit warnings in the third quarter 2016, two more than the previous three months but 11 fewer than the same period in 2015. Twenty of the warnings blamed the fallout from the EU referendum vote, but EY said that overall the initial Brexit impact had been mixed and the negative effects were focused on sectors most exposed to business uncertainty and the weaker pound.

Alan Hudson, EY’s head of restructuring for UK and Ireland, said: “Companies are contending with a daunting level of uncertainty. Last summer it was the falling oil price and worries about growth and US interest rates that dominated. This summer it was the fallout from Brexit. Meanwhile, companies are still facing competitive and disruptive forces in their own markets.

“For most companies it has been business as usual and for some, the falling pound has been a help rather than hindrance. But the picture will change again as we start to see broader economic effects come through.”