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BUSINESS

Ifo business confidence jumps

German business confidence jumped unexpectedly in May, a closely watched survey showed on Wednesday, underscoring the dogged resilience of Europe's biggest economy.

The business climate index calculated each month by the Munich-based economic research institute Ifo, rose to 103.5 points.

Economists polled by Thomson Financial News had forecast the index would fall to 101.9 after dropping to 102.4 in April, the biggest monthly loss since September 2001.

An Ifo statement quoted president Hans-Werner Sinn as noting however that “the business climate index only partially recovered its losses from April.”

In March the index had stood at 104.8 points.

Surveyed companies nonetheless “now assess their current situation more positively,” Sinn added in another sign that Germany was resisting the effects of a US economic slump, high energy prices and the euro’s rise against other major currencies.

For its monthly survey, Ifo polls 7,000 companies about their assessment of current business and their expectations for the next six months. It is considered the most reliable barometer of the current state of the German economy and its outlook.

A breakdown of the results showed that the current situation index also rose to 110.1 points from 108.4 in April, while the expectations indicator edged up to 97.3 points from 96.7 points.

“On the whole, the dampening of economic activity in Germany in the months following the very good first quarter should be moderate,” Sinn said.

German gross domestic product (GDP) grew by 1.5 percent in the first quarter of 2008, official data showed last week, the fastest quarterly rate since early 1996.

“May’s rise in the German Ifo index provides some encouragement that German businesses are seeing economic activity hold up pretty well,” said Jennifer McKeown at Capital Economics.

“It leaves the index far above its long-run average and at similar levels to those reached in the second half of last year.”

BUSINESS

France’s EDF hails €10billion profit, despite huge UK nuclear charge

French energy giant EDF has unveiled net profit of €10billion and cut its massive debt by increasing nuclear production after problems forced some plants offline.

France's EDF hails €10billion profit, despite huge UK nuclear charge

EDF hailed an “exceptional” year after its loss of €17.9billion in 2022.

Sales slipped 2.6 percent to €139.7billion , but the group managed to slice debt by €10billion euros to €54.4billion.

EDF said however that it had booked a €12.9 billion depreciation linked to difficulties at its Hinkley Point nuclear plant in Britain.

The charge includes €11.2 billion for Hinkley Point assets and €1.7billion at its British subsidiary, EDF Energy, the group explained.

EDF announced last month a fresh delay and additional costs for the giant project hit by repeated cost overruns.

“The year was marked by many events, in particular by the recovery of production and the company’s mobilisation around production recovery,” CEO Luc Remont told reporters.

EDF put its strong showing down to a strong operational performance, notably a significant increase in nuclear generation in France at a time of historically high prices.

That followed a drop in nuclear output in France in 2022. The group had to deal with stress corrosion problems at some reactors while also facing government orders to limit price rises.

The French reactors last year produced around 320.4 TWh, in the upper range of expectations.

Nuclear production had slid back in 2022 to 279 TWh, its lowest level in three decades, because of the corrosion problems and maintenance changes after
the Covid-19 pandemic.

Hinkley Point C is one of a small number of European Pressurised Reactors (EPRs) worldwide, an EDF-led design that has been plagued by cost overruns
running into billions of euros and years of construction delays.

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