British businesses are slashing their marketing and advertising budgets, the sharpest downturn for the third quarter in a row since Sept. 11, according to the latest Bellwether report, Media Guardian reported Monday.

The report, covering a quarterly measure of the marketing industry, pointed out that if trends from the second quarter of 2008 continue, the overall British marketing spending may drop in absolute terms.

“The initial budgets set at the start of the year were only modestly higher than 2007, so any subsequent cuts could lead to an absolute fall in marketing and advertising spending for the year,” said Chris Williamson, the report's author and chief economist at financial analyst firm Markit.

“Rising costs and weaker-than-expected sales put pressure on companies to cut marketing budgets in the second quarter to protect profit margins,” he added, according to Media Guaridan. “This raises the possibility that marketing spend could fall this year for the first time since the survey began in 2000.”

The Internet was the only one with budget increases – 19 percent of companies reported a budget rise set at the start of the year, while only 12 percent reported a decline.

Although the growth of digital spending has dramatically slowed since the first quarter this year, there were still 27 percent of respondents reporting an increase in their online marketing budgets since the start of the year.

Anthony Wreford, the deputy chairman of Omnicom Europe, said he expects Internet marketing to rise.

"Internet spending will continue to grow as more clients see the importance of this form of communication and the ability to use this medium, like PR, in a tactical context," said Wreford.

Direct marketing budgets were down at the greatest rate in the survey's eight-year history, while the sectors with the biggest drops were in travel/entertainment, retail, consumer durables and fast-moving consumer goods, Media Guardian reported.