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German biz confidence slides
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October 21, 1998: 7:18 a.m. ET
Survey shows business confidence drops sharply, well below expectations
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LONDON (CNNfn) - Business confidence in Germany took a sudden downward step in September, according to a poll released Wednesday.
The Ifo economics institute's monthly survey of West German business sentiment showed a sharp drop last month to 94.0 from 97.1 in August.
"This is the worst thing we've had from the German economy for some time," said Holger Schmieding, European economist at Merrill Lynch.
"The scale of the fall was bigger than expected, although it's certainly not disastrous," said Robert Prior, European economist at HSBC Securities
"This points to a slowdown in industrial production growth to 2 percent year-on-year," Prior added.
The survey was carried out around the time of Germany's general election, and analysts speculated it could be the first sign of business's attitude towards the new government.
A fall was expected following a relatively robust summer.
The survey is not expected to lead to a rate cut when the Bundesbank Council meets Thursday.
"The Bundesbank does not react to such short-term things," said Merrill's Schmieding, "there's still only an outside chance of a rate cut." 
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