Confidence across Europe is on the up - except in the UK

 
Jake Cordell
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Nerves got the better of the English, Scottish, Welsh and Northern Irish in April
Nerves got the better of the English, Scottish, Welsh and Northern Irish in April (Source: Getty)

After a bleak start to the year, things are looking up in the Eurozone, according to the latest confidence indicators out this morning.

For the first time in 2016, the economic sentiment indicator - the EU's official measurement of the feel-good factor across the continent - went up instead of down.

Read more: These economists say the EU is "evil"

The index came in at 103.9 - up from 103.0 in March - on an index where a score of 100 represents the long-term average, led higher by an optimistic production outlook from firms across the single currency bloc.

"The increase in Eurozone sentiment resulted from improvements in confidence among consumers and in all business sectors except retail trade, where confidence decreased slightly," researchers at the European Commission said.

The Eurozone's service companies were feeling especially optimistic, where confidence shot up by 1.9 per cent on the back of a healthier outlook for exports over the next few months.

However, analysts said that despite higher confidence, Europe was still in trouble.

"April’s rise in Eurozone business and consumer confidence does not change the bigger picture that growth in the currency union seems to be slowing," said Jack Allen, European economist at Capital Economics.

British blues

The UK, however, bucked the trend, with a sharp fall in confidence - down from 106 to 104.4. Confidence in the UK has dropped by more than six points since the end of 2015, and is well off its peak of 119.1 reached in the summer of 2014.

At the start of the year it was financial turmoil that was weighing on economic sentiment. But now, analysts say Brexit is the guilty culprit.

"UK consumer confidence weakened in April as recent mounting concerns over the economic situation and outlook were highly likely reinforced by the looming referendum on UK membership of the EU," Howard Archer of IHS Global said.

"With the Bank of England, the Chancellor and many others warning that UK economic activity would likely suffer in the aftermath of a vote to leave the EU amid heightened uncertainty, it is not surprising that consumers are becoming more worried about the economic situation and outlook," he added.

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