German consumer morale improved slightly heading into October lifted by the European Central Bank's stimulus package, the GfK market research group said on Thursday, suggesting a recent ECB rate cut aimed at reviving the economy might be working.
The GfK consumer sentiment indicator, based on a survey of 2,000 Germans, rose to 9.9 points in September from 9.7 in the previous month.
The reading beat the consensus of a Reuters poll of analysts which had forecast the indicator to remain unchanged at 9.7.
Household Spending
Household spending has become an important pillar of support in Germany as its exports falter.
Domestic demand is boosted by record-high employment, above-inflation pay increases and low borrowing costs.
Earlier this month, the ECB cut rates deeper into negative territory and promised bond purchases with no end-date to push borrowing costs even lower, hoping to kick-start activity nearly a decade after the bloc's debt crisis.
'Increase In Propensity To Buy'
"The ECB decision has on one hand resulted in an increase in propensity to buy, and on the other resulted in propensity to save reaching its lowest level since April 2016," Rolf Buerkl, a researcher for Nuremberg-based GfK, said in a statement.
Buerkl said German consumers were now afraid that banks could impose penalties on private investors in the future.
"It will become clear in the coming months whether this is sustainable," he said, adding that positive consumer sentiment will depend on the stability of the labour market.
The survey was conducted between 4 - 16 September.
