German business confidence has slipped for the second month in a row, suggesting that growth has peaked in Europe's largest economy, writes Derek Scally in Berlin. The closely watched index from Munich's Ifo economic institute fell by 0.7 points to 110.4, although managers said they were still confident about their current business conditions.

The optimism of 7,000 German managers interviewed monthly by Ifo pushed the current assessment to 116.3, the second-highest ever value, up from 115.8 in March.

“Despite considerable risks at international level, German companies are doing splendidly,” said Ifo president Prof Hans- Werner Sinn, adding that managers were not worried about economic risk from the Japanese crisis or rising oil prices.

Despite the Ifo dip, economics minister Rainer Brüderle said the economy was “in good spring form” and “companies remained optimistic”. Ifo chief economist Kai Carstensen said euro zone monetary policy was still too loose for Germany. “ECB rates are too low,” he told Bloomberg television.