UK's ITV says budget uncertainty is hitting ad demand

LONDON (Reuters) -British broadcaster ITV warned advertising revenue would be 9% lower in the last quarter of 2025, reflecting pullback by advertisers after the government put Britain on notice of tax rises in the budget later this month.

ITV, Britain's biggest free-to-air commercial broadcaster, said it was seeing "widespread caution" across sectors as brands braced for the impact from expected tax rises from finance minister Rachel Reeves on November 26.

The company said on Thursday it would make 35 million pounds ($47 million) of temporary savings to offset the lower ad spend, keeping it on track to meet full-year guidance.

ITV, which will bring hit show "I'm a Celebrity... Get Me Out of Here" back to screens later this month, has two divisions, Media and Entertainment, which covers the broadcast channels and streaming service, while its Studios business, makes content such as "The Reluctant Traveller" for Apple TV.

The forecast 9% drop in total advertising revenue (TAR) for the October-December period was well below the flat estimate from analysts, and came after TAR for the previous three months was flat.

"We are adjusting our costs to match this current reduction in demand," Chief Executive Carolyn McCall said, citing "increased uncertainty" in the run up to the budget.

British retailer Marks & Spencer, which advertises with ITV, had warned on Wednesday that customers were worried about the budget.

ITV said that for the first nine months of the year, total group revenue was up 2% to 2.795 billion pounds.

($1 = 0.7451 pounds)

(Reporting by Sarah Young; Editing by Kate Holton and Paul Sandle)