German business morale rises to 86.6 in July, beating forecasts

German business confidence improved more than expected in July, with the Ifo Institute’s business-climate index rising to 86.6 from a marginally revised 85.7 in June and beating the 86.0 median forecast in a Reuters poll. The gain was driven by a jump in the expectations index to 86.7 from 84.3, while the current-conditions gauge slipped to 86.5 from 87.0. Ifo President Clemens Fuest said that despite uncertainty in the Persian Gulf, the German economy was showing less pessimism. The broad rise in sentiment across sectors suggests Europe’s largest economy may be finding a floor after a prolonged period of industrial weakness, though weak order books, high energy costs and geopolitical tensions still pose risks to a sustained recovery.