German industry is the engine of Europe’s economy, and it is sputtering.

Tuesday’s Ifo survey showed German industrialists’ forecasts at their most negative since 1991. It has been a great leading indicator for German industrial production in the past and Absolute Strategy Research of London suggests the latest numbers are consistent with an annual fall of 5 per cent in production. Growth was negative in the second quarter, so this raises the risk of a full-blown recession.