UK Austerity Is a Myth: WPP CEO
The U.K. government may have managed to save its economy from an embarrassing "triple-dip" recession, but it has received a damning indictment from the CEO of the world's biggest advertising group, who said that austerity in the U.K. is a falsehood.
Growth in the U.K. came in at 0.3 percent on Thursday against forecasts of 0.1 percent and Finance Minister George Osborne said that it was a sign that the economy was healing and the government's controversial austerity plan was working.
But Martin Sorrell, CEO of WPP told CNBC there is no such thing as austerity in the U.K.
(Read More: Three Charts That Show UK Austerity Isn't Working)
"The minute differences you are talking about, whether it's 0.3 one way or the other, I think are largely irrelevant. There's no doubt that we are bumping along the bottom in the U.K.," he told CNBC Friday.
"I call it a corrugated bottom: it has its ups and its downs. I'm sure we'll have more alarms and excursions."
According to the U.K. government, the deficit has been slashed by a third since it came to power in 2010. But Sorrell pointed to rising spending instead.
"In fact, in money terms, government spending is rising. If you track it from '10-'11 through to '14-'15, in money terms, government spending will rise," Sorrell said.
(Read More: UK Avoids 'Triple-Dip,' but Struggle Ahead)
The government has already missed its own deficit targets. Net public sector borrowing in 2012-2013 came in at 120.6 billion pounds ($186 billion), only a touch lower than the previous year's 120.9 billion pounds.
"This austerity that people talk about is not a real cut, in nominal terms, it's rising. When you adjust for inflation, which I think the treasury does, they claim that it's a cut."
(Read More: UK 'Not Much Room for Maneuver': Fitch)
According to data from the treasury, the U.K.'s overall debt pile is still growing. At current rates, net public sector debt will rise to 1.637 trillion pounds ($2.5 trillion) by 2017-2018.
—By CNBC.com's Matt Clinch; Follow him on Twitter @mattclinch81