On Monday, November 2, Goldman Sachs and Morgan Stanley downgraded Europe’s fourth-quarter economic outlook as a spike in COVID-19 cases led to the introduction of partial lockdowns in some countries. According to experts, the implementation of restrictions in several European countries in November contributed to a slowdown in the eurozone economy. France and Germany along with the United Kingdom imposed nationwide lockdowns last week. Severe new restrictions in the UK came into force on Thursday, November 5, as the second wave of the coronavirus pandemic threatened to overwhelm the health service. Analysts at Goldman Sachs expected gross domestic product (GDP) in the eurozone to plunge by 2.3% in the fourth quarter. The bank projected a rise in figures by around 2.2% earlier. As for the UK economy, Goldman Sachs cut its forecast to minus 2.4% from a 3.6% increase it had previously estimated. Meanwhile, Morgan Stanley economists predicted a modest contraction of the euro area’s GDP in the fourth quarter of 2020. They also downgraded the UK GDP growth forecast to minus 3% versus minus 2%. Morgan Stanley pointed out a more complex W-shaped economic recovery that was likely to take place instead of the previous V-shaped one. Meantime, the outlooks of other analysts are pessimistic as well. Thus, Citi economists predicted a 4% decline in UK GDP for the accounting period and did not rule out a more prolonged national lockdown.
