Marketing budgets in the United Kingdom are plummeting as 35 percent of advertisers said they cut back their budgets in the third quarter, according to the latest Bellwether Report.

The quarterly report, issued by The Institute of Practitioners in Advertising, the UK's agency association, is based on marketers' online responses and has become one of the key indicators of the health of the British marketing economy, AdAge reported.

The latest report showed the biggest downturn in ad budgets in the survey's nine-year history. This is the fourth quarter in a row in which top UK marketers have said they are reducing spending, AdAge reported.

Traditional media have experienced the sharpest budget downturn, with 26 percent of respondents making cuts. Online ad spending is even stagnating - only few marketers are planning to add to their budgets. Sales promotion and direct-marketing budgets performed a little better than traditional media, according to AdAge.

“The slump in marketing budgets indicates a severe worsening of business confidence and the rising impact of the credit crunch on the real economy, as companies rein in spending in the face of poor sales and growing fears over the economy,” according to chief economist at Markit and author of the Bellwether Report Chris Williamson.

Only 12 percent of respondents said their companies saw marketing budgets increase for the third quarter.

Respondents said the budget cuts were mostly due to lower-than-anticipated sales and profits, reflecting weaker consumer and corporate demand, as well as growing concerns about the economy, AdAge reported.

Only 8 percent of respondents were more optimistic about the outlook for their industry than in the previous quarter, while 69 percent said they were less optimistic.

The Bellwether Report collected responses mostly by e-mail from a panel of about 250 top UK marketers, representing all key business sectors and selected from the nation's top 1,000 companies, AdAge reported.

For an SFN posting on the previous Bellwether Report, please click here.