JP Morgan has increased its GDP growth forecasts for the US and eurozone based on a 24pc rise in global car sales, an acceleration in US mortgage applications and a steady improvement in consumer spending.
“As this bounce takes hold, it will take time to distinguish whether we have embarked on a V-shaped recovery in the level of GDP or are tracking our forecast of a bounce to malaise,” said the investment bank.
Extended support from government spending and low interest rates around the world could also mean this is a stronger rebound than that seen after the financial crisis, JP Morgan said.
It now expects the US economy to shrink by 4.7pc in 2020 before growing by 2.9pc next year, with the eurozone down 6.4pc this year and up 6.2pc next year. The UK is forecast to contract by 9.2pc then rebound by 7.2pc.
However, there are also signs that the recovery will gather pace only more slowly, including some underwhelming developments in China.
Industrial output is recovering with May’s production up 4.4pc on the year. This was not as strong as economists had anticipated, despite a major boost from surging demand for industrial robots and construction equipment.
At the same time consumer spending remains shaky as shoppers and diners remain cautious.