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German business confidence falls to lowest level since November 2012

German investor morale fell in July to the lowest level since November 2012 and much more than expected, a survey by German think tank ZEW showed on Tuesday.

The Mannheim-based ZEW institute's latest indicator of economic sentiment in Germany fell in July, to -6.8 points from 19.2 points in June. Reuters had expected the index to fall to 9.0 points.

ZEW said the economic and political uncertainty brought about by the U.K.'s decision last month to leave the European Union (EU) was largely responsible for the decline.

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"The Brexit vote has surprised the majority of financial market experts. Uncertainty about the vote's consequences for the German economy is largely responsible for the substantial decline in economic sentiment. In particular, concerns about the export prospects and the stability of the European banking and financial system are likely to be a burden on the economic outlook," ZEW President Achim Wambach said of the survey.

The survey compiled the views of 220 German investors and analysts between July 4 and July 18. It showed that their assessment of the current conditions in Germany was just as pessimistic with a separate gauge of current conditions falling 4.7 points to 49.8, from 54.5 points in June.

With regards to the euro zone, the financial market experts' sentiment was equally subdued. ZEW's indicator of economic sentiment for the euro zone declined considerably by 34.9 points to a reading of -14.7 points.