David Wighton: Business Editor’s Davos commentary
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Like the snowdrops that have finally started to flower, a good piece of news on the European economy has finally materialised, in that most unlikely of locations – Germany.
The rise in the Ifo index of business confidence, the first increase in eight months, follows a similar rise in investor optimism and suggests a degree of confidence in the stimulus package recently announced by Angela Merkel.
Two of the highlights of the package included a measure lifting the annual salary threshold at which no income tax is paid to €8,000, and another rescuing a significant number of middle-income earners from moving into a higher tax bracket.
Either of these would have been considerably more desirable than the gimmicky VAT reduction unveiled on this side of the North Sea just before Christmas which, as the CBI’s distributive trades survey confirmed yesterday, appears to have been no help to the economy whatsoever.
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