According to a survey released by the European Commission, confidence among UK businesses fell more in May than in any other country in Europe. The commission said that the overall measure of business and consumer confidence in the UK fell for a second consecutive month from 95.7 in April to 91 in May and a drop of 4.7 points more than falls in Italy and the Netherlands. The sharp fall in the UK’s business and consumer confidence puts it close to that of the Eurozone, which is suffering a sovereign debt crisis that economists fear could lead to the collapse of the currency bloc. 

The survey also revealed a sharp decline in confidence amongst the UK’s industrial sector with the measure falling to -13.8 in May from -1 in April. Confidence amongst retailers also dropped to -6.8 in May from -2.5 in April. However consumer confidence rose slightly to -21.8 in May from -24.4 in April but UK consumers are more pessimistic than their counterparts in the Eurozone, where consumer confidence in May was -19.3, and the wider European Union, where consumer confidence was -19.4.

Howard Archer, chief UK and European economist with IHS Global Insight, describes the latest results as worrisome for growth prospects in the EU. “A second successive substantial dip in overall eurozone economic sentiment in May taking it down to a 31-month low is a further blow to eurozone growth hopes, especially as it follows on from the purchasing managers’ surveys indicating deepening contraction in services and manufacturing activity,” he says.