German consumer confidence highest in eight years

Consumer sentiment is up as shoppers hit the stores for Christmas and looked to the new year with optimism

German consumer sentiment hit its highest level in eight years as shoppers felt more upbeat about Europe’s largest economy going into 2015.

Market research group GfK said its forward-looking consumer sentiment indicator rose to 9.0 going into January from 8.7 in December, the highest reading since December 2006.

"Consumers apparently now assume that the period of economic weakness in Germany will pass and the domestic economy will return to growth in the coming months," GfK said in a statement.

The reading is based on a survey of around 2,000 Germans, who give their expectations about pay and the economy in the coming months, as well as their willingness to spend money.

However, the research group warned that concerns about instability in Ukraine, Syria and Iraq and the Ebola outbreak continued to drag on the economy.

Germany’s economy has struggled to regain momentum since narrowly avoiding recession in the summer.

The country's factories posted a meagre rise in output last month, as the slumping euro failed to lift exports.

Industrial production grew by just 0.2pc in October on a month earlier according to official data, falling short of the 0.3pc growth expected by economists.

Earlier this month the Bundesbank slashed its growth forecasts for 2014, 2015 and 2016, halving its growth estimate for Europe’s largest economy next year.

The German economy is now expected to grow 1pc in 2015, half the Bundesbank had forecast in June, and 1.6pc in 2016.

GDP rose 0.1pc in the third quarter of 2014.

Source: The Telegraph