Ad giant WPP to switch its HQ back to the UK

The FTSE 100 company, which is headed by Sir Martin Sorrell, has been based in Dublin since 2008 following changes to the corporate tax regime introduced by Mr Osborne’s predecessor Alistair Darling.

But with the coalition removing the threat of double taxation on overseas earnings by multinational companies from next year, WPP said it will ask its shareholders to vote in December on a proposal to return to the UK.

The move came as WPP announced a seven per cent rise in pre-tax profits to £358m for the six months to June 30.

But it disappointed investors by downgrading its forecast on underlying revenues growth for this year to 3.5 per cent from four per cent.

It reported a slowing of revenues in the United States and certain markets in western Europe, but said the UK and faster-growing markets such as Latin America were doing well.

WPP owns companies including public relations (PR) firm Ogilvy, communications agency RLM Finsbury and market research firm Kantar Worldpanel.

Its trimmed forecast comes in what should be a strong year for WPP, with spending boosted by the US election, the Olympics and Euro 2012 football tournament.

“The second quarter was a little bit slower in the US and western continental Europe,” said Sir Martin.

“The first quarter was strong. But now it is not a lack of confidence, it is uncertainty.”

Sir Martin said 2013 was likely to be more challenging, even though GDP forecasts are for stronger growth than in the current year.

There will be no major sporting events in the year.

Analysts said the slowdown in organic revenue growth came as a surprise, particularly in the US where it turned negative in the second quarter, following a good set of net new business wins.

“This trend is likely to be a key focus for investors, but we would expect some US improvement in the second half given factors such as PR revenues picking up around the election,” said UBS analysts.