Page last updated at 12:18 GMT, Tuesday, 9 December 2008

German investor confidence rises

German retailers have been preparing for a tough Christmas

German investor sentiment is slightly less negative in December, despite falling exports and the eurozone battling a recession.

The Zew Economics Institute said its main gauge of confidence rose to -45.2 points from -53.5 in November.

The index was still negative and below its historical average of +27.1 points.

The Mannheim-based institute said a further interest rate cut by the European Central Bank had contributed to the improvement.

The poll was carried out among financial analysts.

But Zew's president Wolfgang Franz warned of tough times ahead.

"The German economy is slipping deeper into the recession. There is great uncertainty about the pattern of the business cycle in the next year," he said.

Analysts have also downplayed the significance of Zew's latest figures.

"Overall, fundamental data are telling us that things will get worse in the coming months and quarters, before there's the prospect of stabilisation, " said Alexander Koch, analyst at Unicredit.

Germany has launched a 480bn euro ($606bn; 404bn) rescue package for German banks hit by the credit crunch, and a tax holiday on the sale of new cars.

But Chancellor Angela Merkel attracted criticism when she ruled out further tax cuts before elections in September next year.

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