Pay attention to WPP boss Sir Martin Sorrell on Brexit and Mark Carney

Sir Martin has pointed to a softening advertising market as an early sign of "Brexit anxiety". It could get worse if the Government ignores him and allows the Governor of the Bank of England to walk away

“If the value of a currency falls it’s rather like the country’s stock price falling,” WPP boss Sir Martin Sorrell told the BBC.

A neat analogy that. Sir Martin also warned that the advertising market in the UK is softening. This, he opined, is one of the first signs of Brexit anxiety taking hold of the economy.

Brexiteers, at this point, will start to gnash their teeth and wail about recent economic statistics, such as the better-than-expected GDP and employment numbers that have been released in recent weeks.

In so doing they will, as usual, be wilfully missing the point. As I have written in the past, while those figures and others may have been better than expected, the cheerful economic news comes largely from lagging indicators that tell us what has been going on. They say nothing about the future.

The economy has held up, as has the labour market, largely because despite the political crisis following the vote, the economy wasn’t immediately affected. The UK stayed in the EU, with all the benefits that brings including, crucially, access to the world’s biggest single market.

As things stand that won’t last forever, nor will the economy’s buoyancy in the run-up to the UK formally cutting off its nose to spite its face by invoking Article 50 of the Lisbon Treaty. As leading indicators, which give us an idea of what might happen in the coming months and years, have been demonstrating.

Advertising is very much a leading indicator. A drop off usually provides one of the first signs of trouble to come when an economy is primed for a fall, not least because the ad budget is one of the easiest for companies to cut when they start to get nervous.

The softening WPP is experiencing in the UK ties in with the performance of the pound, which has fallen in response to the markets’ view of its economic prospects post Brexit. As Sir Martin elegantly put it, the share price of UK plc has fallen on the international markets.

Of course, Sir Martin was a vocal Remainer, which is something Brexiteers will also point to. But so what? If WPP’s UK business was firing on all cylinders he’d be more than happy to tell us about it, Brexit or no.

As it is, the UK served up one of the few downbeat notes in an otherwise sparkling WPP trading statement. If you adjust for the fall in the pound – which gives the company’s figures an artificial boost – overall sales increased by a jaunty 7.8 per cent for the July to September period. The real stock market took note and marked up the shares.

Sir Martin would obviously prefer for his second biggest market to be in good shape. But the UK accounts for just 14 per cent of his business so WPP, a rare example of a British industry leader, will be able to weather a downturn at home. As a multi-millionaire, Sir Martin will be able to weather it too. The rest of us should be so lucky.

However, we might be better placed to deal with the coming storm were our Government to listen to some of his advice. Sir Martin thinks that the Bank of England’s governor Mark Carney, who has said he will reveal by the end of the year whether he will depart in 2018 or stay until 2021, should stick around.

There is mounting speculation that he will not. While he has said it will be a “personal” rather than a political decision, he has attracted the ire of Eurosceptics largely because he told the truth as he saw it during the a referendum campaign in which verity largely took a holiday.

His Tory critics include the likes of Lord Lawson, chancellor during a Thatcher Government in which the seeds of many of this country’s economic problems were planted, and Daniel Hannan, an MEP who has been whining that the Bank’s policy of stimulating the economy with ultra-low interest rates and quantitative easing (likened to printing money) hurts savers.

The latter point, of course, ignores the fact that the Bank and Mr Carney had little choice. The alternative – using fiscal levers to stimulate the economy – wasn’t available as a result of the austerity policies pursued by the Conservative Party in Government.

Moreover, Mr Carney is an internationally respected figure who has credibility with the world’s financial markets. Without his steady hand, the UK’s economic waters could become much choppier. Even more so if the Government were to opt to play politics while appointing his replacement.

When it comes to the issue of Mr Carney, who would you rather believe? A man judged to be the world’s second best chief executive by the Harvard Business Review. Or a pair of ideologues seemingly willing to tip the UK economy off a cliff to prove a point?