LONDON (AFX) - GERMANY
-The key Ifo business climate index is expected to decline for the third month in a row, with economists looking for a fall to 104.3 in September from 105.0 in August, continuing the correction from the 15-year high of 106.8 reached in June.
This will follow a further sharp decline in the ZEW research institute's German economic expectations, which dropped to -22.2 in September from -5.6 in August.
'Following the further sharp drop in the ZEW expectations index amid signs of a loss of growth momentum in the US, the Ifo will likely slide modestly further,' said Holger Schmieding of Bank of America.
In particular, the business expectations index is projected to continue weakening in anticipation of a marked slowdown in growth when the German VAT rate is raised next year. Economists expect the expectations index to slip to 100.6 in September from 101.5 in August.
The business assessment index, which measures current conditions, is likely to continue to show more resilience, however, easing only marginally to 108.3 from 108.6 after holding steady last month. The business assessment index typically lags behind moves in the expectations index by around four months, economists said.
-German import price inflation is expected to slow markedly in August as a result of falling oil prices. Import prices are expected to show a month-on-month decline of 0.1 pct, reducing the year-on-year rate of increase to 5.2 pct from 6.3 pct. In the absence of euro zone import price data, German import price inflation is regarded as the best indication of euro zone imported inflation pressures.
-German CPI inflation is expected to fall sharply in September as a result of declining petrol prices and base effects related to last year's increase in energy prices after Hurricane Katrina, said Ken Wattret of BNP Paribas.
'Be prepared for a striking drop in inflation in September,' Credit Suisse economists said.
Analysts expect the annual CPI inflation rate to drop to 1.2 pct in September from 1.7 pct in August, and the HICP rate to fall to 1.3 pct from 1.8 pct.
UK
-UK business investment for the second quarter is expected to be unrevised on both a quarterly and annual basis at 1.7 and 4.2 pct respectively.
'Underlying fundamentals such as healthy corporate profitability, the recent cyclical upswing and an ongoing fall in the relative price of capital goods should all continue to support corporate capital investment spending,' economists at the Royal Bank of Scotland said.
US
-Consumer confidence is seen rebounding to 104 in September from August's 99.6. Falling energy prices have given extra cash to consumers, but the index is still expected to remain below the average level of the first half of the year. jessica.mortimer@afxnews.com jkm/gp COPYRIGHT Copyright AFX News Limited 2005. All rights reserved. The copying, republication or redistribution of AFX News Content, including by framing or similar means, is expressly prohibited without the prior written consent of AFX News. AFX News and AFX Financial News Logo are registered trademarks of AFX News Limited
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