(Reuters) - British companies froze their marketing budgets during the third quarter amid rising uncertainties about the economy as the UK looks to exit the European Union, a survey showed on Wednesday.
The IPA Bellwether report showed that near 70 percent of its survey panel recorded no change in marketing budget since the second quarter.
Rising inflation - driven largely by the pound’s fall since last year’s vote to leave the European Union - has squeezed household incomes, causing broader economic growth to slow.
The survey, conducted by IHS Markit on behalf of the Institute of Practitioners in Advertising, showed that about 21 percent of the survey panel recorded an upward revision to marketing budgets from the second quarter while 11 percent of companies recorded a trim.
However, internet marketing remained a bright spot as companies continue to take to digital ways to tap into their customers. This increase was led by greater spending in Search Engine Optimisation by companies.
A stagnation of marketing budgets was also seen in the sales promotion and direct marketing categories during the third quarter, the report said.
Growth in ad spending is expected to be a marginal 0.6 percent in 2017 and expected to stagnate in 2018 -- the survey said -- is reflective of the uncertainty associated with Brexit.
“The latest Bellwether survey was characterised by uncertainty, which is reported to be weighing on investment and household spending,” Paul Smith, director at IHS Markit and author of the Bellwether Report said.
British inflation rose to its highest level in more than five years in September, official data showed on Tuesday.
Reporting by Rahul B in Bengaluru, editing by David Evans