Demand within the European IT, telecoms and digital consumer electronics markets will remain buoyant in 2008 despite wider economic uncertainty across the continent, according to a new report.

Research by the European Information Technology Observatory (EITO) suggests that the sector will experience growth of three per cent, taking overall spending to £600 billion.

This momentum will be carried over into 2009, which will see a further 2.4 per cent expansion taking total expenditure to £615 billion.

EITO chair Bruno Lamborghini claimed that a strong foundation will enable the European IT industry to thrive in future.

He said: "Based on solid growth in the European market and their enormous potential in know-how, European companies are well positioned to excel in global competition."

A recent study by Forrester Research found that UK firms signed IT outsourcing deals worth £3.8 billion last year.

British companies now account for almost half of the deals listed across Europe, which now comprises over 50 per cent of the global outsourcing sector.