German business morale unexpectedly improves ahead of Brexit

BERLIN (Reuters) - German business morale unexpectedly improved the second consecutive month in June, a survey showed on Friday, suggesting company executives in Europe's largest economy remained upbeat ahead of Britain's decision to leave the European Union. The Munich-based Ifo economic institute said its business climate index, based on a monthly survey of some 7,000 firms, rose to 108.7 in June from revised 107.8 in May. The headline figure came in stronger than the Reuters consensus forecast for a reading of 107.5. "Sentiment in the German economy improved significantly ahead of the Brexit referendum," Ifo head Clemens Fuest said, adding satisfaction levels with the current business situation were only slightly higher, but the short-term business outlook improved significantly. "The German economy remains buoyant," Fuest added. The rise in the headline figure was driven by improved sentiment in manufacturing, construction and wholesaling while business morale worsened in retailing. The survey was conducted between June 1 and 23 and the majority of replies came in during the first two weeks of the month, an Ifo spokesman said. The results therefore do not incorporate the outcome of Britain's referendum which showed a 52-48 percent split for leaving the European Union. (Reporting by Michael Nienaber; Editing by Maria Sheahan)