IPA Bellwether: UK marketing budgets keep rising in Q2 as confidence falls

UK marketers kept raising budgets in the second quarter of 2026 despite growing geopolitical and economic uncertainty, according to the latest IPA Bellwether Report.

Between April and June, 23.8% of businesses increased their marketing budgets and 16.9% cut them, giving a net balance of +6.9%. That is slightly down on Q1’s +7.3% but still the second-best quarter for budget growth in two years.

For agencies and marketers in the North, the figures suggest client investment is holding up, with events again the strongest discipline.

Where the money went

A net balance of +11% of respondents raised spending on events, making it the top-performing category for the second quarter running. Direct marketing came next at +3%. Main media advertising (+1.5%) and PR (+1.4%) also stayed positive, though at lower levels than at the start of the year.

Within main media, video advertising stood out, with investment at a seven-quarter high (+8.2%). Audio budgets steadied after three years of decline, while published brands saw the deepest cuts (-8.3%). Spending on other online advertising turned negative for the first time in seven quarters.

Confidence slips

While investment continued, marketers became much less confident about the economy.

The balance of businesses expecting their own financial prospects to improve dropped from +0.6% in Q1 to -9.6% in Q2. Views on the wider industry were gloomier still, at a net balance of -25.1%, with more than a third of respondents expecting conditions to worsen.

Paul Bainsfair, director general of the IPA, said: “The overriding message from this quarter’s report is that UK companies continue to recognise the value of advertising.”

“Encouragingly, we also see signs that businesses understand the importance of investing in long-term brand-building; within the main media category, investment in video advertising has been revised up to its highest level in almost two years, while spending on other online activity – a shorter-term activation medium – has been cut for the first time in seven quarters.”

“Despite these positive markers, it is understandable that companies’ financial confidence levels have taken a hit this quarter. Amid geopolitical turmoil, wars, ongoing heightened inflation, supply-chain disruption, not to mention political upheaval closer to home, it makes for an undeniably tough and uncertain environment in which to operate.”

“In light of such challenges, it is therefore more important than ever that companies play the long game and continue to invest in brand-building media that is proven to be better placed to drive sustainable business growth.”

Maryam Baluch, economist at S&P Global Market Intelligence and author of the report, said: “Bellwether panellists have demonstrated notable resilience against a backdrop of persistent economic uncertainty. By continuing to bolster marketing spend – particularly as high inflation threatens to weigh on consumer demand – respondents are indicating a commitment to investment and brand-building activities that underpin growth.”

“The fact there hasn’t been a considerable scaling back of activity in response to the economic shock arising from the Middle East war suggests firms are taking a strategic, longer-term view rather than getting bogged down in short-termism.”

S&P Global Market Intelligence kept its 2026 UK GDP growth forecast broadly unchanged at 0.6%. It expects real-terms advertising spend to grow by 2.1% this year, 2.3% in 2027 and 2.4% in 2028.