Time for a recap, as shareholders stream home:

Advertising giant WPP has faced irate investors at its AGM, two months after CEO Sir Martin Sorrell suddenly quit amid allegations of improper conduct.

Nearly 30% of investors failed to back WPP’s remuneration report -- a tried and trusted method for City bigwigs to chastise errant company boards. There was also a smaller protest at chairman Roberto Quarta, with 17% of investors declining to approve his re-election to the board.

WPP may judge that this could have been worse; the company is no stranger to pay revolts, thanks to the whopping awards handed to Sorrell in former years.

Sorrell’s shock departure, and subsequent allegations of paying sex workers in petty cash and bullying junior WPP staff, loomed over the AGM at London’s South Bank.

Quarta defended WPP’s handling of the issue, saying Sorrell was treated like any other colleague when allegations were first made.

Quarta insisted that data protection rules simply prevented WPP saying any more about the issue.

In an attempt to shut discussions down, Quarta declared:

I know that questions remain, but there is really and simply nothing further we can legally disclose.”

He also defended WPP’s decision to allow Sorrell to leave with stock options worth around £20m. The company’s legal advice was that Sorrell could only lose the awards if he was guilty of ‘gross misconduct’.

Quarta also suggested that WPP understands it has a problem; the company has now launched a review of its policies.

Everyone deserves to be treated with respect, he declared -- which really ought to go without saying...

Shareholders at the packed AGM appeared split. One suggested that Sorrell deserved to lose the money because he was setting up a potential rival to WPP (S4).

But another small investor claimed that the allegations facing Sorrell (which he denies!)were “entirely immaterial”

[reminder, the FT claims he was spotted visiting a Mayfair brothel, and gave some junior staff a thoroughly miserable time].

Shareholders also challenged WPP over its pay scheme -- there was anger that the next CEO’s bonus could be eight times their basic pay.

The company was also criticised for launching a share buyback scheme, as the share prices has fallen sharply in the last year.

CO-COO Mark Read also looked to the future, saying WPP could survive without its founder, and needed a new ‘beating heart”.

Chief transformation officer Lindsay Pattison says there are plenty of suitable internal candidates:

Here’s our news story on the AGM:

That’s probably all for today. Thanks for reading and commenting. GW

Another shareholder asks about the pay on offer to WPP’s next CEO under its new share incentive scheme.

Apparently s/he can earn up to eight times basic pay, if all performance targets are hit.

Shareholders aren’t happy! One shouts out that this is excessive.

Boom! Nearly 30% of WPP shareholders have failed to approve this year’s pay report.

That’s a bloody nose for the advertising giant, as investors show their displeasure over the £19m of share options which Sir Martin Sorrell left with.

Including abstentions, just 70.5% of investors voted to approve the remuneration report, with 29.5% failing to back it.

There’s also a smaller rebellion against the chairman, with only 83% of investors voting in favour of Roberto Quarta’s re-election.

Quarta now turns to the £19m of stock options which Sir Martin Sorrell left with in April.

WPP received “very clear” legal advice that there was no basis to cancelling Sorrell’s entitlement to shares which were due to vest in the next five years, Quarta says.

He accepts that some shareholders find the share award scheme unsatisfactory.

The only way Sorrell could have lost the awards were if “gross misconduct” could be established, Quarta continues, and the board had received very clear legal advice that it could not.

Quarta turns to the resignation of Sir Martin Sorrell, following an allegation of personal misconduct.

He says WPP took a “robust” approach to the allegations, treating him “just like any other employee would have been treated”.

We confirmed that the matter was wholly financially immaterial to WPP, says Quarta.

We understand that some people would like more details, but data protection law prohibits us from releasing more information, he insists.

Quarta continues:

We take this responsibility very very seriously indeed... There is really and simply nothing we can legally disclose.

WPP shareholders are massing at London’s Southbank, for today’s annual general meeting.

As explained earlier, the world’s largest advertising company faces heavy criticism from investors over the recent shock exit of founder Sir Martin Sorrell, and the cloak of secrecy which the firm has tried to throw over the issue.

Some shareholders are certain to vote against WPP’s pay policy, in protest at the decision to allow Sorrell to leave with future share awards worth up to £20m.

Chairman Roberto Quarta is also in the firing line over his handling of the crisis.

My colleague Rob Davies predicts a “chastening showdown with investors”.

WPP has been embarrassed by a string of allegations – strenuously denied by Sorrell – that have leaked into the public domain about the advertising and marketing guru’s behaviour.

Claims have emerged that WPP staff said they witnessed the 73-year-old entering a premises used by sex workers, leading to concerns that the alleged visit was paid for with company money.

Rob is outside the AGM now, and reports that security guards are preventing photographers from snapping away:

The AGM is due to start at noon.

We have fresh evidence that London’s housing market is cooling.

Private rental costs in the capital have fallen over the last year, by 0.2%. That’s the first annual decline since September 2010, after Britain plunged into recession.

Across the country as a whole, rents rose by 1% in the last year -- lagging behind pay rises and the wider inflation rate.

But in the East Midlands, tenants are being charged 2.9% more than a year ago, followed by the South West and the East of England (both 2.0%).

UK households should be relieved that inflation isn’t higher.

City economists had expected CPI to rise to 2.5% last month, meaning inflation would be taking an even bigger chunk of our pay packets (reminder, basic pay grew by 2.8% over the last year).

Weaker inflation also gives the Bank of England less reason to raise interest rates.

Tom Stevenson, investment director for Personal Investing at Fidelity International, thinks the BoE has missed the opportunity to raise interest rates this year.

With UK CPI stuck at 2.4% despite rising petrol prices and higher airfares, the release confirms the underlying weakness of the UK economy. Today’s data follows yesterday’s lower than expected wage growth and Monday’s weak manufacturing data.

Computer game prices fell in May, helping to keep inflation down.

The ONS explains:

Prices for these games are heavily dependent on the composition of bestseller charts, often resulting in large overall price changes from month to month.

The ONS adds that “sugar, jam, syrups, chocolate and confectionery” prices also dropped during the month. Vegetable prices rose, though.

Mel Stride MP, financial secretary to the Treasury, has responded to the inflation data:

“Since last year inflation has fallen from its 3.1% peak but we recognise the cost of living is still a challenge for some families.

“That is why we are freezing fuel duty at the pumps, cutting income taxes for 31 million people and increasing the National Living Wage.”

Today’s inflation report also shows that Britain’s drivers are suffering higher prices at the pumps.

Petrol prices hit a three and a half-year high last month, as motorists faced the impact of higher crude oil.

The Office for National Statistics says:

Petrol prices rose by 4.6 pence per litre between April and May 2018 to stand at 125.3 pence per litre in May, the highest average price since October 2014. This compares with a 1.0 pence per litre fall between the same two months of 2017 to stand at 116.4 pence per litre in May 2017.

Similarly, diesel prices rose by 4.7 pence per litre between April and May 2018 compared with a 1.6 pence per litre fall between the same two months a year ago.

These recent rises reflect increases in the price of crude oil.

Newsflash: Britain’s inflation rate was unchanged at a one-year low last month, despite the pressure from higher energy prices.

The Consumer Prices Index rose by 2.4% in May, matching April’s rate. Inflation hasn’t been lower since March 2017.

The ONS says:

• Rising motor fuel prices produced the largest upward contribution
• There were also large upward effects from air and sea fares, which rose between April and May this year but fell between the same two months a year ago, influenced by the timing of Easter.
• Partially offsetting downward effects came from price changes for games, domestic electricity, food and non-alcoholic beverages, and furniture and furnishings.

More to follow....

My colleague Rob Davies has pulled together a list of questions which WPP should answer at today’s AGM regarding Sir Martin Sorrell’s shock departure earlier this year:

• Why did the company sign a non-disclosure agreement with Sorrell that prevents shareholders from understanding the reasons for his departure?
  
• Given the lack of transparency around the misconduct allegations, why is Sorrell classed as a “good leaver”, granting him access to up to £20m in future payments?
  
• What steps has the company taken to verify claims by company employees that they saw Sorrell entering a premises used by sex workers?
  
• Were board members aware of allegations that he misused company resources by making expense claims for personal costs, and if so, what did they do about them?
• Did board members know about allegations that Sorrell bullied his executive assistants, and if so, what did they do about them?
  
• Did board members offer sufficient challenge to Sorrell’s reign over the company, or did they fall into line?
  
• Why was there no succession plan in place in case of Sorrell leaving the company suddenly, and what progress has been made in finding a successor?
  
• Were details of the investigation into Sorrell’s conduct leaked by another board member, and if so, can investors have confidence in the board’s functionality?
  
• Will there be cultural and strategic change at WPP, and if so, what would that entail?
  
• Are directors concerned Sorrell will lure clients to his new venture S4 Capital, and why does he not have a non-compete clause preventing him from setting up a rival firm?
  
• Does Roberto Quarta have enough time to serve as executive chairman of WPP, given that he is also chairman of Smith & Nephew, another FTSE 100 company?

The front-runner to succeed Martin Sorrell at WPP has launched a review of the company’s codes of conduct.

Mark Read, chief executive of WPP’s digital marketing agency Wunderman, wrote to all staff yesterday to remind staff of the company’s “values”.

Read highlighted some of the bullying allegations against Sorrell (he’s accused of swearing at underlings and calling them useless).

Read says:

“When I come to work I expect to be treated with respect by my colleagues, and every one of you reading this has the right to expect the same.”

“You will no doubt have read the press coverage this week about WPP and Martin Sorrell, including allegations about his behaviour towards people at the parent company.

“Although we can’t comment on specific allegations, I feel we should remind ourselves of and reinforce the kind of values we want and need to have within every part of our business: values of fairness, tolerance, kindness and – again – respect.

“It should hardly need saying that all WPP working environments must be places where people feel safe and supported. They must also be places where people are able to raise concerns if they want to, and where those concerns are dealt with when they need to be.”

Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.

Britain’s cost of living squeeze is in the spotlight this morning, as we get new inflation figures showing how price changed in May.

City economists predict that the Consumer Prices Index rose to around 2.5% last month, up from 2.4% in April, squeezing household budgets.

That would be a blow to consumers, especially as we learned yesterday that basic wage growth slowed to 2.8% in the last quarter,

Royal Bank of Canada predicts that CPI could even have hit 2.6%, which would almost wipe out real wage growth. They point out that petrol prices have risen steeply in recent weeks, as higher oil prices feed through to the pumps.

On the other hand, Marc Brütsch of Swiss Life thinks inflation might be unchanged.

So the pound could be volatile when the data is released, as inflation is a key factor determining whether the Bank of England raises interest rates soon.

Advertising giant WPP will also dominate the headlines today, as it faces irate shareholders at its AGM.

Investors are furious that former CEO Sir Martin Sorrell was allowed to quit the company in April with millions of pounds worth of share awards, despite facing allegations of personal misconduct.

We’ve subsequently learned that those allegations centred on claims of workplace bullying and paying for a sex worker using funds from WPP.

Sorrell turned WPP from a small wire basket maker into the world’s largest advertising company.

He would have featured highly on a list of Britain’s most respected executives - before recent events unfolded.

Shareholders will demand answers about Sorrell’s departure, and succession planning (or the lack of it) at WPP.

Some will vote against WPP’s pay policy, which is set to hand Sorrell future share awards worth up to £20m, despite a lack of information about the reasons for his departure.

Investors are also unhappy that Sorrell wasn’t bound by a non-compete clause, allowing him to set up a new technology and content company called S4.

There could also be a revolt against chairman Roberto Quarta. Tin hats could be needed....

The financial markets look quiet, as traders wait for the US Federal Reserve’s decision on interest rates tonight (a hike is widely expected).

The agenda:

• 9.30am BST: UK inflation data for May
  
• Noon BST: WPP Annual General Meeting
  
• 7pm BST: US Federal Reserve interest rate decision
  
• 7.30pm BST: Fed chair Jerome Powell’s press conference