German consumer sentiment to fall in November - GfK

German consumer confidence looks set to decline in November amid rising coronavirus cases, according to a survey released on Thursday by market research group GfK.

GfK’s forward-looking consumer sentiment index fell to -3.1 for November from a revised -1.7 in October. Analysts were expecting a reading of -2.8.

Rolf Bürkl, consumer expert at GfK, said: "The rapid increase in infection rates is leading to a tightening of restrictions brought on by the pandemic. Fear of a second lockdown, should infections get out of control in the coming winter months, is also increasing.

"As a result, the in parts significant recovery we saw in consumer sentiment at the start of the summer has come to a standstill and is causing the consumer climate to plummet once more. An increase in propensity to save in October has also contributed to this."

ING economist Carsten Brzeski pointed out that the index is at its weakest level since July this year.

"Looking ahead, new uncertainty and new restrictions as well as local lockdowns have already started to dampen consumer confidence and the prospects for private consumption," he said.

"Even if the current measures in Germany can still be labelled as ‘smart lockdowns’, the fact that they will mainly affect sectors which have already been hit the most by the crisis (culture, restaurants, hotels, leisure) is already weighing on consumers. Given that it very much looks as things will first get worse before they get better, both in terms of infections and restrictions, the risk of a double dip in Germany is also increasing."