German business morale rises more than expected in September, Ifo finds

BERLIN, Sept 24 — German business morale rose more than expected ​in September, a survey showed on Thursday, signalling that Europe's largest economy is weathering an ‌energy price shock that has pushed fuel costs to record ⁠highs.

The Ifo institute said its ​business climate index rose ⁠to 89.9 in September from 88.8 in August.

Analysts polled ‌by Reuters had ‌forecast an increase to 89.0.

The reading is ⁠the third piece of ⁠evidence this week that a long-awaited recovery is taking hold.

It follows flash PMI data on Wednesday showing German business activity expanding at its fastest pace in almost a year.

Also, the country's ‌five leading economic institutes presented ​a joint autumn forecast that raised 2026 growth expectations to 1.3% from 0.6%.

Ifo's gauge of expectations rose to 90.4 from 89.1 in August, while companies' assessment of their current situation improved to 89.5 from 88.5, the institute said.

Any pickup ​would be welcome for Chancellor Friedrich Merz, whose ‌conservatives scored their ‌worst ⁠state election result since 1949 in Mecklenburg-Western Pomerania on Sunday as voters punished the government in part because of rising living costs.

Merz's government has decided ‌to cut fuel ​taxes by €0.17 ($0.19) a litre from ‌October 1 until ⁠the ​end of the year.

(Reporting by Kirsti Knolle, editing by ​Thomas Seythal)

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