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* FTSE dips 0.5 pct
* WPP on track for worst day in 2 decades
LONDON, March 1 (Reuters) - UK shares fell on Thursday after advertising giant WPP reported its worst results since the financial crisis and a gauge of British factory activity fell to its weakest in eight months.
Investors have been on edge in recent weeks amid concerns that rising interest rates in advanced economies, led by the United States, could sap global growth.
The FTSE fell 0.5 percent to 7,195.25 points, the decline accelerating after the Purchasing Managers' Index survey data showed February manufacturing output expanded more slowly, despite a marked upturn in orders.
Worries that Britain will not secure an EU exit transition deal also weighed on sentiment, with Brussels' chief Brexit negotiator on Thursday calling on the UK to "pick up the pace" of negotiations so that a withdrawal treaty could be agreed this autumn and ratified by March.
WPP, one of Britain's biggest companies, has suffered as major consumer goods clients cut spending and as Google, Facebook and consultants Accenture encroached onto its territory.
Its shares slumped by 14 percent in early trading, putting it on track for its worst day in 20 years and wiping 2.3 billion pounds off its market value. The results and gloomy comments on the business outlook contrasted with more upbeat guidance from peers Omnicom, IPG and Publicis.
Rentokil Initial shares tumbled 9 percent after its results, which analysts said were in line with expectations but showed slower growth and the need for further digital investments this year.
Rio Tinto and RSA Insurance, trading ex-dividend, fell 3.2 percent and 2.3 percent respectively.
Luxury goods maker Burberry jumped 6 percent after it named a new chief creative officer, Riccardo Tisci, to replace Christopher Bailey. Exane BNP Paribas saw the appointment as positive, pointing to Tisci's "strong track record". (Editing by Janet Lawrence)