German business sentiment rises as French consumer confidence sinks to 13-year low

German consumer confidence eased lower in a November forecast as higher energy costs tied to the war in Iran continued to pressure household finances. The Nuremberg Institute for Market Decisions and GfK’s consumer-climate index, published Wednesday, fell to minus 30.8 from minus 30.6 in October. The result matched a forecast of economists polled last week by The Wall Street Journal.

The release showed a divide between consumers’ views of economic developments and their own finances. “Whilst consumers are increasingly optimistic about economic developments, scepticism still prevails when it comes to their own finances,” said Rolf Buerkl, head of consumer climate at the Nuremberg Institute for Market Decisions. Buerkl said growing concerns about inflation and subdued income prospects were dampening the willingness to make major purchases, even though the propensity to save was falling slightly.

Germany’s inflation hit 3.3% in September, its highest level since December 2023. The Wall Street Journal attributed the increase to continued growth in energy prices as the conflict in the Middle East dragged on.

Consumer sentiment also fell sharply in October forecasts after renewed U.S. strikes on Iran caused oil prices to spike. The Wall Street Journal said inflation data for October would be published Friday.

The household measure moved against the direction of German business surveys. Sentiment among businesses rose for a sixth straight month in October, according to the ifo Institute. The Wall Street Journal said resilience among manufacturers was driving expectations that Germany would continue its tentative economic recovery in the second half of the year, but noted that falling household confidence could weigh on those hopes.

In France, consumer sentiment sank to a 13-year low in October as nationwide protests and questions over the country’s finances clouded the economic outlook.

The separate surveys therefore showed German businesses growing more optimistic while households remained cautious about major purchases. With inflation and income prospects shaping household decisions, the divergence could complicate Germany’s tentative recovery even as manufacturers remained a source of strength.