German business confidence falls to three-year low

German business confidence fell more than economists forecast in August, to a three-year low, heightening concern that Europe's largest economy may be slipping into a recession.

The Munich-based Ifo institute's business climate index, based on a survey of 7,000 executives, fell to 94.8 from 97.5 in July. Economists expected a drop to 97.2, the median of 35 forecasts in a Bloomberg News survey shows.

Germany's economy contracted in the second quarter and may not grow in the third. While oil prices have receded from a record $147.27 a barrel, they're still up 60 percent over the past year, crimping companies' spending power just as the euro's appreciation and the US housing slump weigh on export demand.