UK advertising budgets are set to rise this year as the economy begins to recover, according to a survey by the Institute of Practitioners in Advertising (IPA).

Advertisers cut their budgets again in the final quarter of 2009, but by the slowest rate since the recession began. Around a quarter of companies cut their advertising budgets in the last three months of 2009 while 18% increased their budgets.

The majority of the 300 companies surveyed said they planned increases in budgets for the New Year.

Internet and direct marketing continue to outperform more traditional forms of advertising, with budgets increasing while spending on radio, television and newspaper advertising fell approximately 7%.

Andy Viner, head of media at the accountancy group BDO, which conducted the survey with the IPA, said that confidence is beginning to return to the market as the recession draws to an end.

"After nine consecutive quarters of reduced marketing spend, it appears that the rate of decline is at its slowest in nearly two years," he said.