German financiers less concerned about Brexit fallout

 
Jake Cordell
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Confidence in Germany has held up much better than initially feared following the UK's vote for Brexit
Confidence in Germany has held up much better than initially feared following the UK's vote for Brexit (Source: Getty)

Confidence in Europe's largest economy has bounced back after a sharp fall in the immediate aftermath of the UK's shock vote to leave the EU.

The ZEW economic indicator - one of the leading gauges of optimism among German investors - climbed to 0.5 in August from a reading of minus 6.8 straight after the Brexit vote. Positive scores indicate positive sentiment on the index which is compiled from interviews with senior German financiers.

Read more: German firms really aren't that fussed by Brexit

Nevertheless, the score is still significantly down on its long-term average of 24.2 and came in below expectations. ZEW president professor Achim Wambach said the implications of the UK's EU referendum are still causing some concern for German businesses - though less than was feared this time last month.

Wambach said: "Political risks within and outside the EU ... continue to inhibit a more optimistic economic outlook for Germany. Furthermore, uncertainty about the resilience of the EU banking sector persists."

The German economy grew by 0.4 per cent in the second quarter of the year, though Jennifer McKeown at Capital Economics said the score "points to a slowdown ... to barely positive growth" over the summer. Yesterday, Germany's central bank, the Bundesbank, said firms in the Eurozone's largest economy were expecting only a very modest hit from any Brexit-related uncertainty.

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