Confidence among German businesses is continuing to rise, new research has indicated.

According to the latest business climate index from the Ifo economics institute, business confidence in the European country has improved for the third month in a row.

The index is now 85.9, compared to 84.3 in May, the Ifo revealed, as firms become more optimistic about economic recovery.

Nonetheless the study also revealed that German businesses are not so confident about their current performance, with that part of the June survey dropping to 82.4.

Commenting on the findings Hans-Werner Sinn, president of Ifo, said: "The survey results confirm that the German economy is gradually stabilizing.

"The brightening was solely the result of the firms' expectations - the pessimism of the survey participants with regard to the six-month business outlook has again weakened."

On Wednesday (June 24th), the Organisation for Economic Co-operation and Development predicted that Germany's economy will slowly recover next year.