Dip in UK industrial confidence offsets rise in services sentiment - EC

UK economic sentiment has declined in the industrial sector but confidence in the services sector rose to its highest level in more than two years, according to the European Commission.

The EC's economic sentiment indicator for the UK fell to 109.5 in February from 111.1 in January, dragged down by a decline in confidence in the industrial sector to its lowest level since April.

The industrial component has a 40% weight in the ESI, despite accounting for just 15% of UK gross domestic product.

Confidence in all other sectors of the economy improved, with services sector sentiment up to its highest level since December 2015.

As a result, economists at Pantheon Macroeconomics said their version of the ESI, where the weights for the sub-sectors correspond to their shares of GDP, rose in February to its highest level since January 2016.

"This tentatively suggests that the economy is coping well with the prospect of higher interest rates and that the below-consensus run of activity data over the last month is just a blip."