Economic sentiment in July improved in the eurozone, but weaker in the European Union

Survey results from the European Commission showed Thursday that eurozone economic sentiment indicator edged slightly higher to 104.6 in July, above the expected 103.6 figure, and compared to the prior reading of 104.4. Interestingly, the headline indicator for the European Union dropped by -0.9 points mainly due to the marked deterioration of sentiment in the UK (-4.4 drop).

The euro zone business climate index, pointing to the phase of the business cycle, also increased sharply to 0.39 from 0.22, defying expectations of a decline to 0.17. Sentiment improved in industry, services, retail trade and the construction sector. The only sector which saw more pessimism was consumer sentiment.

Economic sentiment in Britain plunged to 102.6 in July from 107.0 in June, with losses across all sectors. The most spectacular decline was the drop in sentiment among British consumers to -9.2 from -1.2 in June, followed by a 5.5 point drop in optimism in retail trade and a 3.9 point fall in industry.

The Euro was little changed versus the US dollar after today's eurozone economic confidence figures came better than expected. EUR/USD was trading at 1.1090 at 12:15 GMT.