WPP upgraded its annual net sales outlook thanks to higher client spending but shares in the world's largest advertising group slid 8% as the news failed to excite investors expecting stronger forecasts.

The results come as investors and analysts look to gauge how advertising will perform against a backdrop of high inflation and slowing global economic growth.

Shares in WPP fell 7.8% to 822.60 pence on the London Stock Exchange today. The stock has climbed 17.2% over the past month, compared with a 6% advance for the FTSE 100 index.

WPP now expects like-for-like net sales to grow 6%-7% in 2022, up from an already upgraded forecast of 5.5%-6.5%. It left its headline operating margin outlook unchanged.

Analysts and traders said WPP's results and outlook, while strong, failed to reflect the momentum seen in much more upbeat results from rival ad group Publicis last month.

"Market participants were unimpressed because they were somewhat expecting more for such a firm with strong prospects," said Stephane Ekolo, an equity strategist at Tradition.

"Additionally, the fact that it did not change its margin outlook while raising sales might have raised some red flags, especially when taking into account that rival Publicis did."

Last month, France's Publicis raised its full-year guidance for organic growth and operating profit margin after a solid performance across all regions.

WPP said like-for-like net sales from the technology sector grew 12% in the first half, helped by a slate of new deals and expansions to existing partnerships.

WPP, owner of the Ogilvy, Grey and GroupM agencies, also said the travel sector was also rebounding strongly, with 23% growth in the first half, although sales still remained below pre-pandemic levels.

Chief executive Mark Read said he was not particularly worried about a forecast recession in Britain, pointing to client spending holding up across industries and markets. The UK accounts for 13% of WPP's overall business.

"We're yet to see any major impact on advertising spend," he said in an interview.

"We are in very close contact with our clients on spending patterns and their investments and consumer spending has held up around the world surprisingly well," he added.