Ad sector warns of Q1 2026 slump as Reeves’ Budget bites

The UK government is still battling the fury and outcry over Chancellor Rachel Reeves stinging budget last week, which many viewed as doing little or nothing for UK businesses.

Even today, Labour Prime Minister, Sir Keir Starmer, was forced into pleading with the nation that no one ‘lied’ over the budget, despite on the record promises from the Chancellor last year that there would be no need to tax the nation so heavily again this year.

The Budget and business

While companies digest and come to terms with how the controversial budget will impact them in the months ahead, business confidence is likely to be less exuberant as we head into 2026, with caution being the watchword.



Among those affected will be those in the media, marketing and advertising sectors, and some have offered their initial takes on the budget.

James Taylor, CEO at Particular Audience, told Mediashotz: “Overall, the budget risks short-term confidence erosion and ad caution.

“Consumer sentiment, already fragile, has plunged further in November amid doom and gloom over tax hikes and borrowing costs.

“Inflation is up, and wages are getting squeezed.

“Ad spend forecasts were cautiously optimistic pre-budget, but higher business costs signal a mood of restraint in the immediate future.

“I expect a big push into Christmas sales followed by a quiet Q1. Retail media will draw a greater share of ad budgets, given that it offers measurable outcomes with quick impact.”

Chris Pettit, CEO and co-Founder of adtech-focused fintech, Revving, added: “With National Insurance and the minimum wage both going up, smaller marketing and adtech businesses are going to find life tougher in the immediate future.

“And in a digital sector where money already takes too long to reach those who are owed it, that could signal real hardship for companies who are already struggling with cashflow.

“We have already seen significant demand for specialist funding solutions that allow adtech companies to invest and grow when the cash they are owed is slow to arrive, and inevitably we are going to see a lot more companies in that position.”

Also Published in: Mediashotz