UK advertisers cut spending for the first time in four years on tariff turmoil

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British advertisers have reduced their budgets for the first time in four years because the possibility of a trade war struck confidence in the global economy between the main brands of consumers, according to a commercial magazine in the industry.

The Advertising Practitioners Institute said on Thursday that advertising budgets shrunk in the first quarter of the year.

Almost a quarter of the companies listed in the quarterly iPa data reported a reduction in marketing budgets, while about the fifth said there would be an increase. That balance pushed in favor of business to reduce spending on ads for the first time since the first quarter of 2021.

The results of the IPA are the latest evidence of withdrawal between UK companies, as it is struggling with a sharp rise in the costs of employment that was revealed in the budget last year and the uncertainty caused by a successive trade war.

Marketing budgets are closely related to commercial morale, as the spending is seen as an indication of economic expectations due to the number of companies that determine budgets based on expected sales.

“In the face of president Trump often turns political and economic standards, it is understood that more companies in the United Kingdom have adopted a cautious approach,” waiting and seeing “in marketing, spending this quarter,” said Paul Pinzfar, IPA General Manager.

He also pointed to other issues that raise business confidence in this quarter, such as increases in national insurance contributions to employers and the high minimum wage, which led to “an increase in investment in promoting short -term sales and discounts in the main media budgets.”

IPA said that the difference between companies that cut and raise and raise budgets was 4.8 percent in favor of those who reduce spending – a reflection from the previous quarter when 1.9 percent of companies grow more than their budgets than their execution.

The report said: “The opening quarter of 2025 has sparked a significant decrease in financial horizons, both at the company and the level at the level of industry,” adding that nearly a third of the respondents felt less optimistic about their performance in the first quarter compared to the previous three months. The company’s confidence has decreased to its lowest level since the last quarter of 2022.

“Where do I start? I am not sure that anyone knows what the future is hiding, and if he claims, it is likely to change tomorrow,” said Samantha Smith, Managing Director of Six April Six (Mobility), a global marketing agency, and head of the IPA city of Bristol, South West and Wales.

IPA has found that many marketing executives still expect advertising budgets to grow throughout the year despite the reduction in the first quarter. More than a third of the respondents expect an increase in their total marketing budgets, almost increasing the prediction rate.

In the first quarter, direct marketing activities of consumers attracted the highest increase in spending, followed by events and sales promotions. Media marketing budgets through all homes, sound and video are all shrinking.

S& P Global Market Intelligence, which produced the IPA report, has reduced its expectations for economic growth in the United Kingdom to 0.6 percent, from 1 percent, in part in response to the new American fees on British imports.

However, no changes to their implementation of advertising for 2025 and 2026 of the increases of 1.3 percent and 1.8 percent, respectively.