UK business confidence falls as marketing spending increases

Financial confidence prospects by UK companies fell to its lowest level since 2013, despite spending on advertising is set to increase, the latest IPA Bellwether report revealed on Thursday.

The study, compiled by Markit, was based on responses from 300 marketers from the UK's top 1000 companies.

About 12.2% of companies increased their marketing budgets in the second quarter of 2015, mainly focused toward events, which experienced a rise in net balance of 7.4%. On the other side, Internet budgets slowed to 6.8%.

The report stressed that nearly all other categories recorded marginal growth, including main media advertising, public relations, market research and direct marketing.

On the other side, only 25.3% of the UK companies that took part in the study reported feeling optimism about their financial prospects, in comparison to 37.8% in the same period of the previous quarter, hitting its lowest level in the last two years.

The author of the report and senior economist at Markit Paul Smith commented that the growth in marketing activity remained at a rate "historically strong".

"Below the surface, however, the underlying drivers of growth are a little harder to read ... Whereas we see growth holding up in 2015 overall, the latest survey supports the projection of softer expansion further out."

Smith also added that although he saw growth holding up in 2015 overall, "the latest survey supports the projection of softer expansion further out."

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