'Brand America' tarnished by S&P downgrade, says WPP chief Sir Martin Sorrell

Sir Martin, chief executive of WPP, the world's biggest advertising group, made the comments as he revealed a 37pc leap in pre-tax profits in the first half, but said growth in the US had been slower than expected at just 2.3pc.

"The downgrade doesn't make Brand America look good. On the one hand, does it matter? If it got downgraded, it got downgraded," he said. "Where it is really important is psychological. I don't think Americans understand how significant a dent [it has put] in its reputation around the world."

Standard & Poor's cut the US government's credit rating from AAA to AA+ earlier this month for the first time in the country's history.

However, America is not the only nation whose image has suffered lately, Sir Martin added.

He said "Brand Britain" had been tarnished both by the riots and by the custard pie attack on Rupert Murdoch, chairman and chief executive of News Corp, when he was giving evidence in Parliament.

"I had clients in Brazil writing to ask if I was ok... I was embarrassed. We have to get our act together."

WPP shares rose 43 to close at 623p on Wednesday after the company reported £334.3m of pre-tax profits on revenues up 6pc to £4.7bn.

The weaker-than-expected performance in the US was offset by "surprisingly" good growth in the UK, where year-on-year revenues grew 7.1pc.

Two years ago, Sir Martin predicted a "LUV recovery" for the global economy, with an L-shaped recovery in Western Europe, a U-shaped one in North America and a V-shape for the BRIC countries - Brazil, Russia, India and China.

On Wednesday he said his prediction remained "battered but intact", although he added that the global economy still faced a "long hard slog" to recovery.

He warned never to underestimate America, on account of its scale and entrepreneurial culture, noting that its economy was still $15 trillion (£9 trillion) compared with China's $3 trillion.