ITV warns political paralysis will take toll on advertising

ITV today warned that the outlook for the second half of the year was "highly uncertain" as it fears a hung parliament could hit the economy and advertising.

Political paralysis could also affect ITV's hopes of easing tough advertising rules, known as Contracts Rights Renewal, although the Britain's Got Talent broadcaster pointed out all three main parties are willing to review CRR.

ITV's wary outlook came despite reporting a 6% increase in revenues to £450 million in the first quarter. Advertising revenues rose 8% and, as expected, are set to leap 22% in the second quarter following last year's record declines. April was up 23%, May is forecast to be up 27% and June 15%.

New chief executive Adam Crozier said advertising was still "below 2008 levels", adding: "The outlook for the latter part of 2010 and early 2011 is tough, with more-testing year-on-year comparators."

ITV insiders signalled that they fear ad budgets may have been brought forward because of the election and World Cup. ITV shares tumbled more than 5% to 57.8p in line with the wider market.

Paul Richards, analyst at Numis, said: "A clear Tory majority would have been unquestionably good news for ITV. There is cross-party support for relaxing broadcasting regulation but because you have a hung parliament, the process could take a bit longer."