UK marketing budgets are at an all time low not seen since since Sept. 11, 2001, due to poor sales, increasing energy and resource costs and lack of trust in the economy, according to the latest Bellweather Report, Advertising Age reported Wednesday.

The report was conducted by collecting data largely through e-mails from 250 top UK marketers that represent the main business industries.

In the first four months of 2008, budgets were higher than in the previous year but that is predicted to worsen by the end of 2008. The UK marketing expenditure increased by 2.8 percent last year, which is the slowest rate since 2001. By the end of this year, a downturn in expenditure may take place, according to Advertising Age.

"There is a clear implication that the economy will slow further. Agencies can do two things: firstly, focus even more closely on cost control, and secondly, strive for even more original and innovative solutions so they can buck the trend," Moray MacLennan, IPA president and M&C Saatchi Europe chairman, told Advertising Age.

The only media sector that is evolving is the Internet, with a 6 percent budget increase compared to budget levels six years ago, and search marketing which is increasing by 9 percent, Advertising Age reported. However, only 19 percent of marketers are boosting their digital budgets, compared to 27 percent in the first quarter of 2008. Twelve percent of marketers are slashing their online budget this year, compared to an earlier survey, in which 5 percent said they would cut budgets, the report stated.

Twenty-seven percent of marketing companies cut their traditional media budgets since 2006, compared to 11 percent who augmented their expenditure in the field, according to the report.

Direct-marketing budgets in sectors like travel, entertainment and consumer goods were cut by 19 percent of companies by shifting campaigns from e-mail to mail, Advertising Age wrote. A 9 percent decline in outlays is predicted this year.

Marketing spend by organisations like state, charities and computing services is increasing, the Bellweather report showed, according to Advertising Age.