The head of the International Monetary Fund (IMF) on Wednesday said the outlook for the global economy had “darkened significantly” since April and she could not rule out a possible global recession next year given the elevated risks.

Cash-strapped Sri Lanka has raised interest rates one percentage point on Thursday, the second sharp hike in three months, as the central bank warned of 80 per cent inflation and a painful recession.

Investors hoping the second half of the year would bring some relief after a bruising six months, may not be feeling very optimistic after the last 24 hours.

Caspian Pipeline Consortium (CPC), which takes oil from Kazakhstan to the Black Sea via one of the world’s largest pipelines, has been told by a Russian court to suspend activity for 30 days although sources said exports were still flowing.

European stocks sank Tuesday along with oil prices, while the euro slumped towards parity with the dollar on deepening recession fears as central banks contend with soaring inflation.

Asian stocks fell and the dollar stood by a two-decade high on the euro on Wednesday as investors’ fears deepened that the continent is leading the world into recession, while oil and European equity futures made a wobbly attempt to steady.

The Russian rouble extended the previous session’s sharp slide on Wednesday, slumping to its lowest since late May against the dollar and euro and heading back towards levels the government prefers as intervention speculation swirled.

Eurozone consumers cut spending on food, drinks and tobacco for the second straight month in May amid a spike of prices, according to estimates from the European Union statistics office Eurostat released on Wednesday.

China’s crude oil imports from Russia soared 55 per cent from a year earlier to a record level in May, displacing Saudi Arabia as the top supplier, as refiners cashed in on discounted supplies amid sanctions on Moscow over its invasion of Ukraine.

Oil prices rose Wednesday after suffering a painful drop the previous day, though the euro remained wedged at a 20-year low and equities mostly fell in Asia as recession fears continue to flow through trading floors.

Britain’s new finance minister Nadhim Zahawi pledged on Wednesday to rebuild and grow the struggling economy and said he would look at all options to do that, including possible tax cuts.

Norway and Sweden have joined the ranks of central banks opting for 50 basis-point interest rate rises, delivering their biggest policy tightening moves in two decades.

New Zealand’s business confidence continued to worsen in the second quarter of this year as companies grappled with increased costs and higher interest rates, a private think tank said on Tuesday.

Inflation in Turkey in June soared to an annual rate of 78.6 per cent -- the highest in 24 years, according to official data released Monday -- as President Recep Tayyip Erdogan’s unconventional economic policies continued to take their toll.

By some early estimates, the US economy, as measured by gross domestic product, may have shrunk in the three months from April through June. Add that to the decline from January through March, and that would be a contraction for two quarters in a row.

Russia’s invasion of agricultural power Ukraine has severely disrupted the global wheat market, prompting warnings that the conflict could lead to hunger in some countries.

Zimbabwe’s central bank said it would start selling gold coins this month as a store of value to tame runaway inflation, which has considerably weakened the local currency.

Germany recorded its first monthly trade deficit since 1991 in May as a result of higher import prices, figures released Monday show.

Oil rose on Monday as supply concerns driven by lower OPEC output, unrest in Libya and sanctions on Russia outweighed fears of demand-sapping global recession.

The European Central Bank on Monday unveiled plans to integrate climate change into its monetary policy in a bid to encourage eurozone businesses to pay more attention to their environmental impact.