Germany's business confidence reached the highest in five years in October, a leading German economic institute said on Tuesday.

The Munich-based Ifo economic institute said the confidence index reached 98.7 points in October compared to 96 in September.

The index based on a monthly survey of 7,000 executives was considered one of Europe's key economic indicators.

The index is much higher than expected. It is the highest since October 2000.

Also on Tuesday, the Federal Statistics Office reported that consumer prices in October is expected to go up 2.4 percent on the previous year.

The consumer price index for Germany has risen 2.5 percent on the previous year in September, the office said.

"A distinct trend in October 2005 was the rise in gas prices, which within one month (compared with September 2005) were up between 1.1 percent and 10.7 percent in six states taken as a basis for the estimate," the office said.

The "harmonized consumer price index" for Germany, which is calculated for European purposes, will presumably rise 2.7 percent in October 2005 compared with October 2004.

Compared with the preceding month, the "harmonized" index will be up 0.2 percent.

The final results for October 2005 will be available in about mid-November 2005.

Source: Xinhua