German business confidence jumps in October

The IFO institute´s business confidence index for Germany jumped from a reading of 109.5 in the month of September to 110.5 for October.

Economists had been expecting a reading of 109.6.

A sub-index tracking companies´ expectations was the main driver behind the gain in the headline index, rising from 104.5 in the month before to 106.1 (consensus: 104.5).

A similar gauge linked to firms´ current conditions improved from 114.7 to 115.0 (consensus: 114.9).

As of 0907 BST euro/dollar was edging higher by 0.02% to 1.0877.

Commenting on the figures, Jennifer McKeown, chief Eurozone economist at Capital Economics, said: "The BCI is now at its highest level since April 2014 and appears consistent with a rise in annual GDP growth from Q2’s 1.8% to about 2.0%. That supports the message from the PMI that the economy is growing at a pace of around 0.4% per quarter."

For his part, Claus Vistesen, chief Eurozone economist at Pantheon Macroeconomics added: "If we continue to see these numbers, it would suggest that GDP growth is accelerating. Across industries, the services index fell marginally, but the expectations index rose, which matters most as this is the key leading component. The other details of the survey also were strong. The aggregate manufacturing sentiment index rose to a 30-month, although we have to wait for tomorrow to see the indices for new orders and production expectations due to IFO’s data embargo on these details."

-- More to follow --