UK economy set to struggle, warns Sir Martin Sorrell

Sir Martin Sorrell, boss of the world's biggest advertising company WPP, warned today that a new government must tackle the public deficit and the British economy will fall behind European rivals as a result.

Sorrell said Britain had performed better than western Europe in the past six months but explained: "I worry after the election that it [the UK] will move to be the worst position in western Europe."

The WPP chief executive, speaking from Hong Kong where he watched last night's final leaders' debate in Britain on TV, said "there has to be action" on the deficit.

"The election has been a delay. They just have to get on with it."

Sorrell played down the threat of the Greek debt crisis and wider contagion: "I do think it will get sorted out."

He added that he was "cautiously optimistic", with WPP revenues improving slightly on previous falls each month in 2010. March saw the first increase in 14 months, up 1%.

Overall revenues in the first quarter to March 31 were flat on a like-for-like basis, ahead of budget.

Sorrell said North America performed particularly well, up 4% after a 5% fall the previous quarter: "A nine-point swing is a big difference." Western Europe remains "the most challenged".

WPP said in a statement: "We are in the process of reviewing our quarter one revised forecasts, but early indications are that the improvement in revenues, compared with budget, seen in the first quarter, will continue for the balance of the year, with full year like-for-like revenue growth of around 2%."

French rival Publicis beat forecasts for its first-quarter sales last week, when it reported organic growth of 3.1%.

Omnicom Group, which reported first quarter organic revenue up 2.1%, said it had seen a stronger performance in the US, Africa and the Middle East.