German confidence falls as Eurozone crisis bites

THE GERMAN economy is set to worsen, if the indicator of economic sentiment published yesterday by the Centre for European Economic Research is correct.

Sentiment dropped 5.7 per cent in September compared with August. That is the seventh consecutive monthly fall in the Zew index, and takes it to -43.3 points, a level last seen in December 2008.

The index is composed from a survey asking whether respondents expect the economy to improve, get worse or remain the same. Just 8.3 per cent this month expected an improvement, while 21.6 per cent anticipated a deterioration in the situation.

Banks and insurance companies reported the worst figures, posting sentiment figures of -66 and -55.9 respectively. As 70 per cent of respondents are in these industries, that may bias results, said analysts from Barclays Capital.