Ad Boss Warns Uncertainty Will Kill Growth

Advertising mogul Sir Martin Sorrell has urged ministers to move quickly to resolve the UK's future after the Brexit vote, warning that uncertainty facing business could spell "death to growth".

Sir Martin, a Remain supporter and boss of the world's biggest advertising group WPP (LSE: WPP.L - news) , made the comments as the group warned that the UK could fall into recession following the EU poll in June.

The chief executive acknowledged growing evidence that the economy had shown a resilient response to the outcome, saying business had "perked up" in July.

But he attributed the robust performance to the weakness of the pound - which boosted the value of WPP's international income when converted into sterling.

"That's not the way to salvation. We can't benefit for the long term on that," Sir Martin told Sky News.

"What worries me is the process that we have to go through over the next two to three years and the uncertainty that causes, and the inherent conflict between what Government wants and what business wants.

"If we can sort that out quickly that would be better."

He added: "What the Government probably needs is more flexibility and more time to negotiate with the EU and indeed other nations post the EU. What business wants is certainty. What's the death to growth is uncertainty."

Sir Martin pointed to this uncertainty being added to by conflicting reports about when the Government would trigger Article 50, setting in chain the process for exiting the EU.

His comments came as WPP reported a better-than-expected rise in first half sales and nudged its revenue forecast higher on strong demand across the board for its services.

However pre-tax profits fell 40% to £425m compared to the same period last year, largely due to an accounting write-down on the group's investment in analytics firm comScore.

Stripping out one-off items, earnings rose. Shares (Berlin: DI6.BE - news) climbed 5%.

WPP said UK revenue growth had slowed in the second quarter amid pre-referendum uncertainty but that the business was stronger in July "perhaps reflecting a post-Brexit vote recovery, driven by a weaker pound sterling".

On the global outlook, the group said: "Whilst there seems limited likelihood of a worldwide recession… there have been and will be individual countries that go into recession, as Russia and Brazil already have and a post-Brexit United Kingdom might."