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Business

German consumer confidence at record high

German consumer confidence is expected to hit a 16-year-high in August. The GfK indicator echoes similarly positive business trends, giving Chancellor Angela Merkel a welcome fillip before the election in September.

GfK, a Nuremberg-based market research institute, said on Thursday that its forward-looking consumer confidence indicator - based on a survey of about 2,000 consumers - is expected to rise to 10.8 points in August from a 10.6 in July.

Analysts were expecting next month's indicator to stay at its July level.

"The German economy is now firing on all cylinders," Rolf Bürkl, a researcher at GfK, said in a statement, with consumers also expecting further improvements over the remainder of the year.

The survey showed that consumers have shrugged off global worries, including Brexit negotiations, US President Donald Trump's protectionist "America First" stance and tensions between Germany and Turkey.

Income expectations have hit their highest level since German unification in 1990, the GfK said.

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The institute said the "income euphoria" among households was "based on the excellent state of the employment market."

At 5.5 percent, German unemployment is at a record low, while weak inflation and historically low interest rates have helped boost consumer confidence.

Germany's manufacturing economy is also in good health, anticipating a surge in already robust exports.

This is the latest piece of positive economic news to boost prospects for Chancellor Angela Merkel as she prepares to seek re-election on September 24, seeking a fourth term in office.

The Munich-based Ifo economic institute said on Wednesday that German business confidence also hit a record high in July, showing the mood in the nation's boardrooms at "euphoric" levels.

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jbh/hg (dpa, Reuters)

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