UK recovery 'is outpacing eurozone'

The British economic recovery is leaving many eurozone countries in the shade as confidence soars among UK businesses and the financial services sector continues to enjoy improved operating conditions.

Some economists feel the UK could be the world's fastest-growing developed economy over the coming years, surprising those analysts who felt the country would continue to struggle despite its deficit reduction plans, reports the Financial Times.

Eric Chaney, chief economist at French-based insurer Axa, told the newspaper his team anticipate further (positive) surprises from the British economy in the coming months - although, as this unexpected upsurge has highlighted, predictions are a difficult game in such a mercurial atmosphere.

Robust credit growth and an increasingly flexible labour market are two reasons for optimism, suggested Mr Chaney.

Furthermore, despite the concerns expressed by various business bodies over the last few months, he argued that investors are unlikely to feel there is any serious possibility of the UK leaving the EU, at least in the near future.

Axa sees foreign investors "playing the domestic side of the economy" as stronger growth and the value of the pound encourage more consumption across the country.

"By contrast they are not interested in UK companies producing or trading commodities because the global outlook for commodities is bleak," he added.

Jiang Jianqing, head of Industrial and Commercial Bank of China, recently told the newspaper that London's status as a global financial hub is a major reason for the UK's attractiveness to external investors.

"Of course the UK itself also has very big investment needs, and its industrial base and financial system are also highly developed.," he added.

Optimism in the British economy was also clear in the latest Boardroom Bellwether report from the Institute of Chartered Secretaries and Administrators, which canvassed the views of FTSE 350 firms.

Some 87 per cent of companies have a plan for engaging with their investors, while 80 per cent anticipated a positive change in the UK's economic conditions over the next 12 months. Only two per cent expected a decline.