Global recovery has entered a slower phase

Economic activity rose sharply in most economies as lockdowns eased during May and June. But, outside China, GDP is still some way below pre-COVID levels and there are signs that renewed virus fears are already prompting a slowdown. Gains in industrial production were generally weaker in July than in June. (See Chart 1.) And, if the high-frequency mobility data are anything to go by, the previously impressive rebound in consumer spending appeared to stall in August. While we expect the global recovery to continue, it seems to have entered a slower phase and is unlikely to resemble a V-shape.