Ad spending by British companies rose by 2.1 per cent over the course of 2016, following a strong fourth quarter, but advertisers should prepare for budgets to shrink over 2017 as economic uncertainties over Brexit take their toll.

The figures come from the IPA Bellwether report, which is published by IHS Markit on behalf of the Institute of Practitioners in Advertising . The year-end report was revised from its forecast, which had previously estimated growth of 1.9 per cent.

Despite this increase, the firm remained pessimistic about 2017, predicting a 0.7 per cent fall in UK ad spending as companies tighten their belts in preparation for the triggering of Article 50 and the UK's exit from the EU,...