Following the easing of COVID-19 lockdown measures, findings from a survey by IHS Markit/CIPS point to a return to growth for the British economy in the third quarter of 2020, spurring hopes of a rapid recovery.
The survey found that UK manufacturing, which makes up around 10 per cent of the economy, returned to growth in June, while a modest contraction in activity was recorded in Britain’s services sector, which translates to 80 per cent of the UK’s economic output.
On the other hand, the survey also revealed that demand continues to be weak, and job losses are still on the rise, albeit at a slower rate than previous months.
This comes as German business morale showed a record rise in June, pointing to the possibility of Europe’s largest economy returning to growth in the third quarter of 2020, according to the Ifo institute.
The Ifo’s June survey showed the business climate index rocketing to 86.2 from an upwardly revised 79.7 in May, prompting Ifo economist Klaus Wohlrabe to predict that the economy should return to growth path in the third quarter.
Despite this, Germany’s economy is still facing its worst recession since WWII, with the German government predicting in April that GDP would shrink 6.3 per cent this year.