FT: Economists Warn of Severe Recession in Europe, US

The risks of the United States and Europe slipping into a severe recession have increased, prompting economists around the world to sound the alarm ahead of the Group of Seven (G7) major industrialized countries summit in Germany two days later.

The economists on both sides of the Atlantic said - in exclusive statements to the British newspaper "Financial Times (FT)" published today,  said that they have become increasingly pessimistic after the US Federal Reserve's decision to raise interest rates to counter high inflation.

They also expressed their concern at disturbing situation in gas supplies in Europe in the lead-up to winter.

On his part, Holger Schmieding, chief economist at Berenberg, the investment bank, " said the balance has now been "turned" as a herald to an economic downturn next year in the United States and Europe.

However, it is expected that the G7 leaders will discuss the state of the global economy at their working lunch scheduled for Sunday when the issue of inflation is expected to dominate the agenda.