German consumer sentiment set to improve a touch in November - GfK

GfK’s forward-looking consumer sentiment index for November is forecast to come in at -41.9, up 0.9 points from October and in line with consensus expectations.

The propensity to buy index ticked up to -17.5 from -19.5, while the income index rose to -60.5 from -67.7.

"It is certainly too early to speak of a trend shift at this time. The situation remains very tense for consumer sentiment," said Rolf Bürkl, GfK consumer expert.

"Inflation has recently risen to ten percent in Germany, and concerns about the security of energy supplies continue to rise. Therefore, it remains to be seen whether the current stabilisation will last or whether, considering the upcoming winter, there is reason to fear a further worsening of the situation."

GfK said the extent to which the measures adopted to cap energy prices will dampen inflation cannot yet be assessed.

"Consumer sentiment will not be able to recover noticeably and sustainably as long as inflation remains high and there are doubts about unrestricted energy supplies," it added.

Melanie Debono, senior Europe economist at Pantheon Macroeconomics, said: "The rise in the headline - likely in part due to the government’s decision to ditch a levy that would have raised energy bills for households from October - was welcome after four straight record lows.

"But the index remains depressed and it’s too soon to sound the all clear; a sustained rise in consumer confidence is unlikely before the end of winter, we think."