all me is a new downward spiral business activity in the 20 country block decline for more, for more than expected in august with its largest economy, germany leading the way the blocks services industry activity fell into decline and contraction and manufacturing oper continued. as a peace globe as purchasing managers index showed on wednesday, the downturn in manufacturing sector was accompanied by a renewed contraction in the services industry and august, business activity and jeremy europe. largest economy contracted at the fastest pace . for more than 3 years, german companies remain pessimistic about the outlook as rising interest rates and high inflation continue to reach him. the man that's good, carson just gives you on this, is that the chief economist at i n g. welcome back to the show carson. so san bring data there. um, how bad is it really? it is very bad trace in all honesty and you don't even need an expert. i think

every undergrads student, any comics can predict what is happening if you have the, the fastest interest rate, high in history, within a year time. we have the chinese economy stuttering. we have the us economy going in some kind of landing b, b itself to be at heart. we have an energy price crisis, we have high inflation. so all this together clearly is pushing the german economy and the european economy. further into a recession, territory. business activity in germany, we talked about that contract and at the fastest pace for more than 3 years. we know that firms here in the country are complaining about a lack of workers and high energy costs. but what specifically is the problem for them right now? as well right now, actually it is the lack of demand for the lack of new orders. um, was it since the war and ukraine started to oregon and boots had been emptying and i had a quite a fast pace on you this spring with 2 month with,

with some really even there. but the, the order books are simply empty. and um, and we also see that inventories have increased so the, the german companies have very little to do. and then on top of that, we have the high energy prices. clearly a huge concern for the energy intensive industry in germany. and on top of that, there is still this visit, the lack of qualified work is, but currently mainly is the lack of demand. here in germany, there has been a political discussion about lowering energy prices for these energy intensive industries. you mentioned there, that's something that the uh economy minister proposed looking at the state of the economy right now, should the german government intervene as well. they can, during the government has not intervene with a short term stimulus. so don't think and turns off we, we have a lock down in the call and the government has to do something to, to bridge the time until the lock down is over. we are in something that is much

more structural. and in this context, some kind of energy price guarantee cap can make sense, but it is not only for the next winter, it should really be for the next 5 to 10 years. so it goes what occurred is clint indenting. sentiment in germany is this uncertainty what is happening to the energy transition was happening to energy process is strongly still attractive. busy for a company to continue producing germany, and you can offset parts of this uncertainty with some kind of guarantee, but not for one year really for 5 or 10 years. all right, let's see what the government intends to do. there are not experts believe that the european central bank intends to pause its height of interest rates. uh, in september, this fresh data that came out today. that would be underlining these plans wouldn't . yeah, i wasn't too sure that these to be really intended to pause, but this data sets have been clearly clearly made even the ones who has been

pushing for another rate hike in september. think twice the cd. i think now also feels that it had been too optimistic with its own growth for kind of easy be expected the european economy to return to potential growth by the 3rd quarter already. it is not going to happen with these data. so i think that the easy people not really be a freight buy, they don't want to create a name the, the longer term, the late impact, negative impact standing from higher interest, right? so this thing argues, in favor of a pause. i think the only problem is if the easing, the pause is episode time or meeting, it will not only be a cost, but it will be the end of the rate $5.00 cycle because the european economy is not going to improve any time soon. so the argument that we're having at the september meeting will hold in october in november and december. so either it is a final rate hike in september, or it is already a pos which will be the end of the rate. i'd cycle in september,

cousins. yes. the chief economist, that i and g carson, as always, thank you or not to some of the other global business stories making years. britain's economy is also slowing and might be heading for a recession. the survey on wednesday showed a slum in factory output and brought a weakness of, as it feels the impact of 14 back to back interest rate increases by the bank of england to find high inflation. hollywood studios and streaming services have released a new proposal to screen writers and a bid to end a strike that has all the production costs, the california economy, billions of dollars. it includes a 13 percent pay increase and provisions for the use of artificial intelligence. more than 11000 writers have been on strikes since may different joined by actors in july. the economic laws from the devastating was fires in hawaii that claimed the lives of more than $100.00 people and destroyed countless buildings is

estimated to be between $4.00 and $6000000000.00. that is, according to ratings. agency moody's rebuilding will be expensive. construction costs on the islands are 44 percent higher then on the mainland. it is a scenario that so western sanctions against the kremlin were intended to avoid. never the less russian crews, messiahs causing death and destruction you in ukraine. apparently contains semiconductors from best and companies like german ship giant and thinking that was the result of research by the drummond daily from $4.00 and minus the company infringing regret this, but seize others as responsible for the deliveries. one of the deadliest weapons and rushes war against you. crane is a cage 101 missile nickname, kodiak, by nato. it travels up to 900 kilometers per hour and can carry $450.00 kilos of explosives. none of its destructive targeting capability would be possible without

its powerful semiconductor chip, which in the case of kodiak, is produced by german electronics joined infinity in. and it's american subsidiary, cypress. that's despite us and use sanctions against russia. sanctions experts say the chips are ending up in russian hands through a long chain of intermediaries, most of which are based in china, vietnam, and the philippines. and all those ship producers are claiming that long supply chains make tracking their product difficult. experts have proven that it's in fact very easy using readily available international customs data. a simple routine inspection turned up delivery of a $150000.00 ships and showed an increase in purchases from individual russian buyers, which they say should be massive red flags. earlier i spoke to earn your defend head of the consulting from co risk, which is investigating

a russian sanctions. and i asked them how the sanctioned ships ended up in russia as well. we know quite a lot about actually they generally come in. we are ation mostly i would reckon a maybe even 90 percent of the chips that come in. we, i see a child in a home call, vietnam, malaysia and other countries, probably because i'm not sure if the chips are produced in asia. but also chips produced in europe in the united states itself, generally comes into the rest of the traders in asia a little bit. we are turkey in order meter, eastern pen, chris and a very, very small amount actually comes in from directed from you members. but that's a very small amount. so if the data is there, if these sales,

if the route that these chips are taking can be tracked. why isn't there done more to stop this circumventing the st. john's? this is a very good question. i have the notion that some customs and police authorities in the west, the rooms are maybe a bit behind. it may be a question of resources or privacy, but it also may be a question of actually getting access to the route to the right data. so uh, the customs dates i am detail for us new ports they are actually be available, it is possible to acquire them directly and to monitor these in a quite effective way. unfortunately, we don't think that is always being done, and that is something that should be easy to fix from the western side. let's.

let's take a look at the producers here among them. obviously the, the big german trips produce or uh, infinity and um, do you believe that these companies are actively trying to get around sanctions and rules? are they acting in good faith and then their products are being abused? that's a very good question. and of course, it's difficult to answer because the producer would have to show that themselves, but frequencies on patterns. of course, in the trade, when you look up to date on we're talking about data on trade routes, hundreds of millions of dollars for all of the digital company and producers. we do see that there is a kind of consistency in some of the trades. for example, there are a few russian importers taking up

a lot of the impulse. there are few asian traders facilitating a lot of the trade. i'm such big uh, patterns and such a red flag. so to say, i think should have been seen. it is not so difficult for big companies if they have probably direct rates resources internally. it's actually indemnify and detect and see these trade going on. and it is possible to really kind of monitor orders over time and see if the producer, for example, could take some measures towards traders middleman retail at several island beard vets, head of consulting from co risk orland. thank you for your thoughts. thanks for watching the

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