World Cup fever appears to be boosting German confidence

Gfk said its forward-looking consumer climate indicator rose to 7.8 points for July, a five-year high.

But shoppers remain worried about the economic outlook and their own finances with a rise in VAT from 16% to 19% due to kick in next January.

Gfk added that World Cup euphoria and a willingness to spend may not translate into actual purchases.

'Feel-good factor'

The results come the day after another survey showed German business confidence had climbed unexpectedly during June, hitting its highest level in 15 years.

Research institute Ifo said its business confidence index rose to 106.8 points in June, from 105.7 in May.

Analysts attributed the rise, which confounded expectations, to strong exports and the effects of the football World Cup being held in Germany.

However, some remain concerned that the football-linked "feel-good factor" could prove short-lived among both businesses and consumers.

Flash-in-the-pan?

The government of German hopes the economy, Europe's largest, is finally emerging from years of stagnation.

But Gfk warned: "Consumers are evidently increasingly concerned that the current economic upturn is just a flash in the pan that will lead to a corresponding downturn in the coming year."

The World Cup ends on 9 July and the spending associated with the tournament will largely come to an end then, although many businesses hope there will be a lasting knock-on effect.

Gfk's survey was based on interviews with about 2,000 consumers.