Record-breaking rises in US and eurozone GDP in Q3 showed the initial rebound in activity was sharp as both economies emerged from lockdown. But clear signs that the recovery was slowing markedly, particularly in Europe, were already apparent even before announcements of new national lockdowns in Germany, France, and England.
The latest lockdowns will be less economically debilitating than those of six months ago and come at a time when other key regions of the world are continuing to expand. Still, quarterly GDP falls across the major European economies of as much as 3% now seem likely in Q4.
The second wave of Covid-19 is raising uncertainty about how quickly things will return to normal, which could diminish second post-lockdown growth bounces and exacerbate medium-term economic scarring. We intend to publish fully updated global economic forecasts on Friday November 6.