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

BERLIN, Sept 24 (Reuters) - ‌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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