Business and consumer confidence in Europe hit a two-year high in April despite major fallout on money markets from the Greek debt crisis, the European Union said yesterday.

The Economic Sentiment Indicator produced by the European Commission hit 100.6 points in April across the 16 countries that share the euro currency, rising substantially from 97.7 in March.

The figure of 100 is described as the long-term average, which means anything above it represents optimism and anything below indicates concern for where the economy is going.

The same survey for the full 27-nation EU, which also includes non-euro Britain and the bloc's fastest-expanding economy, Poland, did even better, crossing 101.9 points.

Markets have also begun to punish Portugal, Spain and Ireland over high public deficits in these countries, but the latest data saw a majority of member states post improved figures.

Germany reported a 4.3-point increase, with France, Italy, Spain, the Netherlands and Britain all rising as well, although Poland slipped fractionally.

"It is very encouraging to see overall eurozone economic sentiment pick up appreciably to a 25-month high in April, and it is particularly welcome to see consumer sentiment improving given that persistent muted consumer spending has been a major factor holding back the eurozone's recovery," noted IHS Global Insight analyst Howard Archer.

"The recovery of the industrial sector is spreading to the other parts of the economy," added Clemente De Lucia of BNP Paribas.

"Confidence improved markedly in the services sector and among consumers. However, the detail of the survey reported that consumers are still cautious."