WPP warns 'Brexit anxiety' is starting to show as business in the UK slows

Sir Martin Sorrell said the British market was a 'little bit softer, maybe reflecting some of the uncertainty around Brexit'

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Advertising giant WPP has warned "the first signs of Brexit anxiety" are starting to show as the company reported slowing revenue growth in the UK.

Chief executive Sir Martin Sorrell, who firmly campaigned for the Remain camp, said the British market was a "little bit softer, maybe reflecting some of the uncertainty around Brexit" in the quarter. 

WPP, the world’s largest advertising group, reported third-quarter revenues of £3.6 billion, up 3.2 per cent compared with the previous year but down slightly from the 3.5 per cent growth rate in the second quarter.

In the UK, growth has slowed to 2.1 per cent in the third quarter from 3.5 per cent in the second quarter.

Speaking to the BBC, Sir Martin, said that even if sales were growing, these were "false gains".

Sterling has lost almost a fifth of its value against the dollar since the referendum in June boosting WPP’s overall revenue by 23.4 per cent to £3.6 billion, with the US and the EU driving growth.

However, when adjusted to take account of currency moves, the increase was just 7.8 per cent.

Sir Martin said: "If the value of the currency falls, it's rather like the country's stock price falling," Sir Martin said.

"We have to watch what impact Brexit is going to have in the fourth quarter."

"All in all, it's a good set of numbers in the third quarter, but it's tough sledding. There's low growth, low inflation, and our clients are very focused on costs."

The chief executive also commented on rumours over Mark Carney’s future as the governor of the Bank of England.

He said he hopes Mark Carney will extend his term at the Bank of England to help ease Britain's economy through the volatility of the Brexit process.

"If Mark Carney stays as Bank of England governor, which I really hope he will do, that will help. His prompt action post the Brexit vote I think softened the blow of Brexit," Sir Martin said.

Since the EU referendum the advertising group has targeted expanding outside of its home market, focusing on its four biggest markets in the EU particularly Germany, France, Italy and Spain.

WPP announced in September that it is investing in French media firm Les Nouvelles Editions Independantes, which owns holdings in newspaper Le Monde and VICE France.

 

Additional reporting by PA

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