German business morale rose in February to its highest level since July 2011. The Munich based Ifo think tank business climate index increased to 111.3 outstripping forecasts.

The index is based on a monthly survey of some 7,000 companies and January’s upbeat reading had economists saying the figures pointed to an economic upturn.

The survey suggests Europe’s largest economy will grow faster in the first quarter after expanding only modestly last year.

A positive sign from the Ifo result, said analysts showed retailers becoming the most upbeat about their current business since 2012.