German business sentiment rises in June, Ifo survey finds
BERLIN, June 24 (Reuters) - German business morale improved more than expected in June, a survey showed on Tuesday, with a particular improvement in companies' future prospects.
The Ifo institute said its business climate index rose to 88.4 in June from 87.5 in May.
Analysts polled by Reuters had forecast a rise in the reading to 88.2.
"The German economy is slowly gaining confidence," Ifo president Clemens Fuest said.
A separate Purchasing Managers' Index survey on Monday showed that business activity in Germany returned to growth in June, driven by a recovering manufacturing sector that saw its strongest increase in new orders in over three years.
Germany, the only G7 nation that has recorded no economic growth for two consecutive years, faces another potential contraction in 2025 due to U.S. tariffs.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
New Statesman
27 minutes ago
- New Statesman
Britain's industrial strategy in an age of energy crises
Illustration by Otto Dettmer / Ikon Images Last night, Iran launched a military attack on an American base in Qatar, the largest U.S. military installation in the Middle East. Meanwhile, the UK's Industrial Strategy White Paper was published. With tensions over Iran's nuclear programme, and threats to close the Straits of Hormuz – through which a fifth of global oil flows – it has never been more apparent that energy independence is not just an environmental imperative, but an economic and security one. Volatile fossil fuel prices have been a major contributing factor to UK recessions, from the oil shocks of the 1970s that helped trigger the early 1980s recession to the energy crisis following Russia's invasion of Ukraine. Climate change will only exacerbate this geopolitical instability in coming years. This is why Ed Miliband's approach of connecting clean energy to economic resilience is sound. As he notes in the strategy's foreword, 'the current geopolitical tensions underscore why energy independence through clean energy is not just environmental policy – it's economic security policy.' The white paper signals a turn towards investment-led growth, and follows Chancellor Reeves commitment of £113 billion of new capital investment in last week's Spending Review. After a decade of stop-start approaches to industrial strategy, this could mark a key turning point. Britain's challenges extend beyond recent geopolitical turmoil to decades of systematic underinvestment. The UK has had the lowest level of investment in the G7 for 24 of the past 30 years (public and private), and business investment is lower in the UK than any other country in the G7 (and 26th in the OECD). By contrast, a well-designed industrial strategy can crowd in public and private investment and drive inclusive and sustainable growth. There are promising elements to the strategy, such as the introduction of targets that require cross-sector transformation (as the white paper positions net zero, for example). The clean energy sectoral plan also connects green energy to national security and economic resilience, challenging the false choice between green growth and economic prosperity. The industrial strategy is also realistic about Britain's place in the global economy – focusing on strategic transformation of key sectors crucial to global supply chains, rather than jingoistic rhetoric about Britain's place in the global economy. Crucially, the strategy recognises that government itself must change. As I argued in our report on lessons from around the world, missions require state transformation. Institutions like public banks and tools like procurement can be used to create inertia, or deliver economic transformation. The changes to procurement reform in the strategy now account for long term investment in communities, moving beyond narrow cost-benefit analysis. But there is still room to improve. While the strategy mentions the need for an economy-wide approach, the strategy remains too narrowly organised. A net zero goal is not just about renewable energy: it must include transforming how we move through sustainable mobility, how we build homes and offices with green materials, and how we eat through sustainable food. And what's more, it remains unclear how different sectoral plans that are yet to be announced – from defence to health – will align with net zero. For instance, government investment in AI and data centres leads to higher energy demand, potentially undermining the very targets the strategy seeks to achieve. The same is true for the way the UK will approach critical minerals in other countries: the lithium we need for electrification is currently too intensely extractive of water. Subscribe to The New Statesman today from only £8.99 per month Subscribe The UK now has 3 investment vehicles engaged in industrial strategy – Great British Energy, British Business Bank, and the National Wealth Fund. There is an opportunity to tie their mandates more strongly to the net zero mission through target dates. Loans can be used to help sectors like steel become greener, as the KFW public ban did in Germany. Similarly, the CHIPS and Science Act in the USA- tied clear conditions to government financing for community benefits as well as climate targets. This means actually working well with business, rather than the 'business friendly' rhetoric of the past. While the government is using the net zero mission to signal greater certainty to the private sector (hoping to bring in further investment), the UK requires a greater whole-of-government approach that can shape the direction of the economy towards a desired goal, rather than simply trying to fix market failures. The strategy's stated aim is long-term growth over 10 years, but we know that government policy needs to have more immediate and positive effects on people's lives to maintain political consensus for transformative action. Visible benefits – like good jobs in economically deprived areas and improvements in the core infrastructure of daily life like transportation and housing – provide the concreate foundations for the UK government to build a compelling narrative around how the green industrial strategy is building a new social contract. Looking beyond the UK, no country can achieve a green transition alone. The global green transition requires increased multilateral action, especially from the global north (the world's highest historic emitters of CO2) to the global south (where major investment opportunities in green transition have yet to be unlocked). With defence spending rising, we must learn the best lessons from mission-oriented approaches, not the worst from traditional military-industrial complexes. Security should encompass not just defence, but climate and economic resilience achieved through coordinated transformation of the economy. The UK has the foundations for an effective industrial strategy. Current geopolitical tensions highlight the urgent need to break free from fossil fuel dependency that has made Britain vulnerable to external shocks for decades. Now it must have the courage to implement it fully – with genuine cross-sector coordination, strong conditionalities, and immediate benefits for communities that demonstrate a credible path to energy independence and net zero. [See more: How Donald Trump plunged America into a blind war] Related
Spectator
29 minutes ago
- Spectator
Without non-doms, who will pay for Labour's bloated state?
We are not the fastest growing economy in the G7, even though the Labour party promised that we would be. We are not topping any tables for inward investment, and we have fallen to the bottom of the league for new companies listed on the stock market. Still, it is good to know that there is still one measure where the UK economy comfortably beats the rest of the world. We are now losing more millionaires than any rival nation. The exodus of wealth out of the UK, it appears, is accelerating – and very soon this is going to turn into a big problem for the Chancellor Rachel Reeves. The UK was already one of the countries that the wealthy were fleeing. But according to a report out today by the advisers Henley & Partners, a record 16,500 millionaires will leave the UK in 2025. This is double the number fleeing China, which comes in at number two on the rankings and which is expected to lose 7,800 this year. It is the first time the UK has topped the annual table, and its lead over the rest of the world is not only huge, it is also accelerating. It is now official. The rich are getting out of Britain in increasing numbers. The ending of non-dom status has driven many of the wealthy foreigners out of the country It is not hard to understand why. The ending of non-dom status has driven many of the wealthy foreigners out of the country. The decision to impose inheritance tax at 40 per cent, one of the highest rates in the world, on their global assets was unsurprisingly a major factor in persuading them to leave. The price of remaining in the UK is now punitively high if you are not British. But it goes beyond that. The UK has developed a very unappealing tax system, with high rates of income tax, a rising rate of corporation tax, increasing rates of Capital Gains Tax, especially for entrepreneurs, along with higher dividend taxes, frozen thresholds, and very high rates of stamp duty and VAT. It is not just the non-doms heading for Dubai and elsewhere. It is the well-off British as well. Of course, the left will celebrate that, and the Starmer government certainly has no time for the millionaires expected to leave this year. But here is the catch. The UK is also uniquely dependent on a small number of well-off people to support its bloated, free-spending state. The top 1 per cent of taxpayers pay 29 per cent of all the revenue from income tax, while the top 10 per cent pay 60 per cent of the total. Other countries take more out of the economy in tax overall, but they squeeze the money out of a broader range of people. The UK relies on a handful of people – many of whom are now leaving. The risk for Reeves is that the exodus now develops a momentum of its own. If that happens, the UK's already precarious public finances will be in even worse shape than they already are – and she will have only herself to blame.
Daily Mail
41 minutes ago
- Daily Mail
SThree shares soar as US contractor demand slows global hiring slump
SThree shares jumped on Tuesday as improved contractual hiring in the US helped slow a sharp fall in the recruiter's global fee income. The group, which focuses on recruitment in STEM industries, reported that its net fees fell by 14 per cent to £159.1million in the six months ending May. Difficult trading conditions affected both contract and permanent hiring, as well as the firm's three largest markets of Germany, the Netherlands, and the UK. The result chimes with the performance of recruitment rivals Hays and Robert Walters, as the industry suffers the impact of a global hiring slowdown. President Donald Trump's tariffs, including a 10 per cent baseline levy on most US goods imports, have also exacerbated global economic uncertainty and weighed on hiring. But SThree reported a sequential improvement in its contract segment in the second quarter compared with the first, driven by strong demand for engineering roles in the US. British companies, meanwhile, are increasingly holding back on hiring, leading to the number of UK job vacancies decreasing by 63,000 to 736,000 over the three months to May. The decline also coincided with minimum wage and National Insurance hikes that Chancellor Rachel Reeves originally announced in her Autumn Budget. From early April, the National Living Wage went up by 6.7 per cent to £12.21 per hour, and employers' NI contributions rose from 13.8 per cent on annual salaries above £9,100 to 15 per cent on wages exceeding £5,000. Consequently, SThree's first-half net fees in the UK plummeted by 28 per cent to £14.2million. But shares in the London-based company climbed more than 9 per cent in early trading before retreating to be 6.9 per cent higher at around 11:15am, although they were still the FTSE 250 Index's best performer. The group's net fees shrank by 14 per cent to £47million in Germany due to weaker demand for technology skills, and by 22 per cent to £28.6million in the Netherlands amidst reduced availability of engineering and technology roles. Following a record prior-year result, SThree's net fees from engineering were 9 per cent lower, while in the firm's life sciences and technology segments, they were 15 per cent and 18 per cent down, respectively. However, SThree said it still expects to make around £25million in pre-tax profits this financial year. Timo Lehne, chief executive of SThree, remarked: 'Whilst market conditions remain challenging, the group delivered a stable first half performance, with a modest sequential improvement quarter-on-quarter. 'As we look forward to an improvement in market conditions, we remain confident in our belief that global megatrends, such as technological advancements and demographic shifts, will continue to shape the future world of work.'
