The fall in the Ifo index of German business sentiment can hardly have come as a surprise. For several months, economists have been puzzled as to why the survey had been outstripping the level of output growth. As Capital Economics points out, the Ifo index is still higher than it was in 2000, when German’s gross domestic product was growing at nearly 5 per cent.

Bond markets fell on the survey report, indicating that investors were expecting an even weaker out-turn. Some might have been influenced by Monday’s Belgian lead indicator, often seen as a bellwether for the broader European economy, which fell sharply. But that might have been a reaction to the unusually strong June number, which was a record high.