German business sentiment suffers an "ominous" drop

Business confidence has experienced a larger than expected fall...

German business sentiment suffers an "ominous" drop

Roberta Basile / AP

Business confidence in Germany took a larger than expected dip August according to the latest data measuring business sentiment.

The Ifo’s business climate index dropped to 106.2 - analysts had expected the measure to rise to 108.3. The Ifo said that this represented a "clear worsening," of the business climate in Germany.

"The German economy has fallen into a summer slump," it continued.

Ifo's index results have been weakening consistently throughout the year. Expectations regarding future business have taken a clear hit since the Brexit vote.

Economists at Pantheon Macroeconomics have described this data as "a bucket of cold water" for the country's economy.

"We now have to be on alert for a further dip below 100, which has traditionally been a strong signal of a slowdown in the economy. Overall, these data also confirm our suspicion that German GDP growth is not accelerating, despite strong growth in the first half of the year," Pantheon's statement continued.

Figures published by Markit on Monday showed that Germany's purchasing managers index slumped to a two-month low.