BERLIN (AP) — German consumer optimism is increasing, driven by a greater willingness to spend caused by this month's European Central Bank interest rate cut.

The forward-looking GfK consumer climate index released Wednesday, based on 2,000 interviews, rose to 8.9 points for July following an upwardly-revised 8.6 points in June.

Consumers' economic expectations climbed 7.7 points to a three-year high 46.2, willingness to buy rose 3.7 points to 53.2, while income expectations dropped 0.6 points to 47.2.

GfK says the ECB's cut of its key rate to 0.15 percent and introduction of a penalty rate on bank deposits "provided an important boost to the consumer climate in Germany" by encouraging consumers to save less.

GfK warns that the crises in Iraq, Syria and Ukraine present an "unpredictable risk factor for the economy."