Global factory activity slumped

LONDON/TOKYO, Sept 01 (Reuters): Global factory activity slumped in August as Russia's war in Ukraine and China's zero Covid-19 curbs continued to hurt businesses, surveys showed on Thursday, although there were indications cost pressures were starting to ease.

Manufacturing activity was weak in countries ranging from Germany to Britain to China in a sign sluggish demand was adding to headaches for companies already suffering from lingering supply constraints.

Meanwhile, major central banks are expected to continue aggressive interest rate hikes and that is also dampening optimism through growing fears of an outright slump.

"We are forecasting a recession in the euro zone and one in the United States next year. Whether that extends into a global recession remains to be seen," said Peter Schaffrik at the Royal Bank of Canada.

There was however some relief for factories struggling with surging costs as weakening demand is having the side-effect of easing price pressures.