According to Sky News, the International Monetary Fund (IMF) has revised its forecast for UK economic growth in 2025 to 1.2%, up from 0.6% earlier in the year. This follows a similar move by the EY ITEM, which also upgraded its outlook to 1.0%, citing stronger-than-expected business activity and frontloaded investment ahead of international tariff changes.
And marketers are responding:
The Q2 2025 IPA Bellwether Report reveals the first meaningful rise in marketing budgets this year, reversing a rare contraction in Q1.
“As we can see from this latest Bellwether Report, amidst the challenging economic environment, companies are viewing their marketing departments and their marketing budgets as essential to help them maintain and grow their businesses.”
– Paul Bainsfair, IPA Director General
What’s Driving the Rebound?
After the first quarterly decline in almost four years, marketing budgets are showing a strong comeback. The data points to a market cautiously regaining confidence, with brands moving from defensive cost control towards more proactive growth strategies.
Top drivers this quarter:
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Budgets rebound: UK marketing budgets grew in Q2 2025 (net balance +5.5% of panellists reporting a rise) – the strongest pace in a year.
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Direct marketing & sales promotions lead: Spend rose in direct marketing (+9% to +9.1%) and sales promotions (+8% to +9.4%), showing more focus on long-term brand building and targeted marketing activity.
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Digital growth: Other online advertising also grew (0.7% to +2.2%), showing ongoing channel shift.
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Cautious optimism: Companies are less pessimistic about their own finances (net balance –3.0%, up from –12.9%) though industry sentiment remains subdued.
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Forecasts trimmed: 2025 adspend growth revised down to 0.7%, but 2026 expected to bounce back significantly to 1.6%.
Together, these trends point to a market that is cautiously regaining confidence, with brands using a mix of tactical activity and longer-term brand-building to position for the expected upswing.
What does this mean for businesses?
With economic sentiment improving and marketing budgets on the rise, businesses across sectors have an opportunity to shift from caution to confidence. Whether focused on growth, brand recovery, or market share, the current environment invites strategic investment in visibility, messaging, and long-term positioning.
“This is really encouraging for our clients. The rebound in marketing budgets – particularly in direct marketing and sales promotions – shows brands are refocusing on channels that deliver long-term brand building, measurable impact and ROI. In a challenging economy, this tactical shift is about making every pound work harder, and that’s exactly where we excel: creating campaigns that not only activate sales quickly but also build longer‑term brand strength.”
– Rob Hunter CEO Hunterlodge
If you’re exploring how to align your next campaign or budget decision with this new wave of confidence, get in touch – we’d love to help you make the most of the momentum.