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Euphoric German businesses brush off world's woes

Wednesday, October 25, 2017 - 01:25

A euphoric mood among German constructors and manufacturers drove business confidence to an all-time high in October. As Sonia Legg reports, the new survey reflected optimism that an upswing in Europe's largest economy has further to run.

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Forget political uncertainty, the Catalonia crisis and the threat to the EU from Brexit Germany is brushing it all aside (SOUNDBITE) (German) IFO ECONOMIST, KLAUS WOHLRABE, SAYING: "The coalition talks seem to be running smoothly, so at the moment they aren't bringing uncertainty into the German economy. In general things are going well. Export expectations are up, industry anticipates exporting more. And consumers continue to buy enthusiastically." Manufacturers and constructors drove business confidence to an all-time high in October. Ifo's monthly survey of 7,000 firms rose more than a point to 116.7. (SOUNDBITE) (German) IFO ECONOMIST, KLAUS WOHLRABE, SAYING: "The German economy is currently so strong that it seems to be unaffected by the world's crises. It doesn't care about any uncertainty, it only worries if the problems become real." Record-high employment, rising wages and ultra-low borrowing costs are driving the consumer-led upswing. It helped Merkel win a fourth term in office last month. But it may also persuade the ECB it's time to tighten monetary policy. (SOUNDBITE), CCLA, CHIEF INVESTMENT OFFICER, JAMES BEVAN, SAYING: "I think Mr Draghi will provide continuing accommodation but I think that he will tell the market that he needs to get its head around the premise that it is inappropriate to have negative interest rates for very extended periods." That though - could actually please many Germans. They've long been complaining about the impact of low rates on their savings.

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Euphoric German businesses brush off world's woes

Wednesday, October 25, 2017 - 01:25