Banks cut Europe’s growth outlook
British Prime Minister Boris Johnson is seen outside the BBC headquarters, as the spread of the coronavirus disease (Covid-19) continues, in London, Britain, October 4, 2020. PHOTO: REUTERS
Goldman Sachs and Morgan Stanley cut Europe’s fourth quarter economic growth forecasts on Monday as a surge in Covid-19 cases prompted the introduction of partial nationwide lockdowns in some countries in November, halting a nascent recovery seen during the summer. UK Prime Minister Boris Johnson ordered England back into a national lockdown from Thursday as a second wave of infections threatened to overwhelm the health service. The move brought England into alignment with France and Germany, which imposed nationwide restrictions early last week. US investment bank Goldman said it expects the euro area’s real gross domestic product (GDP) to shrink 2.3% in the fourth quarter, a sharp reversal from its earlier projection of 2.2% growth. Similarly, it cut UK GDP growth forecasts to minus 2.4% from a 3.6% expansion it had earlier expected. Morgan Stanley called for a modest GDP contraction for the euro area during the fourth quarter, while cutting its UK GDP growth forecast to minus 3% from minus 0.2%. Citi economists, meanwhile, said they expected UK GDP to shrink by over 4% between October and December.
Published in The Express Tribune, November 3rd, 2020.
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