A global bonds selloff has pushed yields up across the board towards post-Brexit highs while the anti-establishment wave sweeping the western world could force a 'No' vote on the Italian referendum in December.
Article / 15 July 2016 at 2:34 GMT

WPP CEO: Businesses need certainty after Brexit

First in Business Worldwide. /

Martin Sorrell: 'If I was in government, I;d postpone the evil day.' Photo: CNBC

  • Uncertainty for business is the enemy of growth, says WPP's Martin Sorrel
  • There is a dichotomy between what business wants and what government can do
  • WPP's share price has been resilient in the wake of the Brexit vote


Corporate giants like WPP need and want to have a more certainty regarding the UK's withdrawal from the European Union (EU), Martin Sorrell, the chief executive of one of the world's largest advertising and public relations companies, told CNBC Thursday.

"The conundrum or dilemma is that what we want in business is certainty, because uncertainty is the enemy of growth, so we want clarity," WPP CEO Sorrell told CNBC.

He conceded that the needs and wants of business were likely to be different from the government's, which is expected to explore its options for a post-Brexit deal with the EU before triggering the official exit procedure.

"If I was in government, I'd want to postpone the 'evil day' (of starting the process of leaving the EU) and try and negotiate the best possible deal … and this could spin out for two years at least," he said.

"So government wants to prolong it but business wants certainty (but) there is a dichotomy between what business wants and what government can do. I think the negotiations are going to be very tough."

 Boris Johnson's move to Foreign Secretary has raised both eyebrows and titters. Photo: Flickr

Sorrell's comments come after Theresa May, the former UK Home Secretary, was appointed as Prime Minister on Wednesday.

Shortly after meeting the Queen as part of the formal process of becoming leader, May returned to her new residence of 10 Downing Street and announced her cabinet with a mixture of pro-EU and Brexit campaigners appointed to the top jobs.

Former Foreign Secretary Philip Hammond replaced George Osborne as finance minister (Hammond campaigned for Britain to stay in the EU) and Boris Johnson, the outlandish former London mayor and prominent Brexit campaigner became foreign secretary – raising eyebrows in Westminster and some laughs on social media site Twitter.

Amber Rudd is the new home secretary and Michael Fallon is the new defense secretary; both were remain campaigners. Leave campaigner and long-time Euroskeptic David Davis was appointed "Secretary of State for Exiting the EU".

Large companies like WPP, which employs over 194,000 people around the world, are in wait-and-see mode as a question mark remains over when the UK will actually start the withdrawal process from the EU, a process that could take two years or more given the complexity of the relationship.

Sorrell noted that while the share price of his own company had been resilient in the wake of the vote and that sterling had strengthened following more political certainty, the Brexit vote "has had a serious impact on the UK economy".

"All the data that we've got over the last two weeks indicates that consumer confidence and corporate confidence was battered by what happened, certainly in the short-term.

"Businesses are looking for excuses not to do things and the key thing is to restore long-term confidence," he said.

-- Edited by Adam Courtenay

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