EU business, consumer confidence edges higher

European business and consumer confidence edged up again in July, as other indicators also show improvement after months in the doldrums, official data signalled on Tuesday. The European Commission said its July Economic Sentiment Indicator rose 1.2 points to 92.5 in the 17-nation eurozone and by 2.4 points to 95 in the full 28-member European Union. The July gains maintain the upward trend seen since May and are the best outcome for more than a year but the readings remain below the 100-points boom-bust line for this indicator. In the eurozone, the advance was driven by "improved confidence among consumers and managers in industry, services and retail trade" while construction was weaker. Italy showed the biggest eurozone improvement, up 2.0 points, followed by Spain and France, 1.2 points each, with Germany, the EU's biggest economy, gaining 0.7 points while the Netherlands lost 2.0 points. Overall, the report fits in with other, slightly more encouraging data suggesting the stuttering eurozone may at last be on the point of escaping a deep and damaging recession. The closely-watched Markit Purchasing Managers Index returned to positive territory for the first time for 18 months in July, according to figures released earlier this month. Howard Archer of IHS Global Insight said the July Commission report marked a 15-month high as the eurozone economy stabilised and it "could very well eke out marginal growth over the second half of the year." At the same time, Archer cautioned that confidence "is still at a relatively low level compared to long-term norms, which suggests that businesses will remain cautious in their employment and investment plans in the near term at least. "Similarly, it is hard to see consumers generally lifting their spending markedly in the near term," he said.