Standard & Poor's has warned that it could downgrade EMI to junk after the world's third largest music group, whose artists include Norah Jones and Coldplay, issued a profits warning yesterday.

A downgrade would leave EMI, which had £976m (€1.4bn) of net debt at the end of the first half of last year, with high yield ratings from both S&P and rival rating agency Moody's and increased borrow costs.