CAPTION: A man carries a plastic bag with the inscription "I love shoppig" through the city centre. (picture alliance/dpa)
German consumer sentiment rose in September for the first time in four months, defying clouds on the economic horizon, the GfK market research institute reported on Thursday.
The Nuremberg-based institute attributed the rise to a further cut in interest rates by the European Central Bank on September 12. Its forward-looking consumer confidence index came in at 9.9 points for October, up 0.2 points on the month.
Last month, the index held steady, after declining three months in a row.
GfK analyst Rolf Buerkl pointed to conflicting trends. "On the one hand, expectations on the economy were able to recover to some extent, while on the other, those surveyed once again revealed greater pessimism with respect to assessing how their own income would change," he said.
Buerkl said the ECB decision to lower the rate for deposits held with it by commercial banks from -0.4 per cent to -0.5 per cent and to resume bond purchases caused a rise in consumer willingness to make purchases. He also noted that the willingness to save had fallen to its lowest level since April 2016.
He suggested that consumers feared their own banks might start to charge them for holding funds.
On Tuesday, the closely watched Ifo institute reported that its business confidence index had risen from 94.3 to 94.6 points. It was the first increase after five consecutive declines.
Analysts nevertheless see Germany as on the edge of a recession, after gross domestic product declined marginally in the second quarter.
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