me is a new downward spiral business activity in the 20 country block decline for not far 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 an 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 to student and economics 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 and 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 quite a fast pace. only 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, um, the, 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 does not intervene with a short term stimulus. so don't think and turns off we, we have a lock down and the call and the government has to do something to, to bridge the time of 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, because what occurred is cleaning, denting sentiment in germany, is this uncertainty what is happening to the energy transition was happening to energy process is germany still attractive 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 when it or yeah, i wasn't too sure that they used 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 city, i think now also feels that it had been too optimistic, who with its own growth forecasts of the 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 these 2 people not really be a freight by don't want to create a name the, the longer term, the late impact, negative impact standing from higher interest rate. so this thing argues, in favor of a pause. i think the only problem is if the east, any pause is episode time or meeting, it will not only be a cost, but it will be the end of the rate pipe 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 hope cycle in september, cousin jessica,

the chief economist at ion g carson as always, thank you or not to some of the global business stories and making years britain's economy is also slowing and might be heading for a recession. the survey on wednesday showed a slumber 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 wildfires in hawaii that claimed the lives of more than $100.00 people and destroyed countess 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. nevertheless, 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, franco, starting, and mine of the company in finland. regrets this but sees others as responsible for the deliveries. one of the deadliest weapons and rushes war against you. crane is a k h one, no one 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 will 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 expert say the chips are ending up and rushing 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 firm co risk which is investigating the russian

sanctions. and i asked them how the sanctioned ships ended up in russia. well, we know quite a lot about that. actually they generally come in, we are a show mostly i would reckon, ag, 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 and or meter eastern pen press 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 these sanctions? this is a very good question. i have the notion that some customs and police authorities in the rest of them, so it may be a bit behind. it may be a question of resources or pro to 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 absolutely 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 west 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 already good question. and of course it's difficult to answer because the producer would have to show that themselves. but frequencies on past terms of the cost in the trade. when you look up the data 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 and some of the trade. 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've such a big uh, patterns of such a red flag sort of 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 it then defy and detect and see these trade going on. and it is possible to really kind of monitor already is all the 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 or orland. thank you for your thoughts. thanks for watching the

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business dw news line from ballot. india becomes the 1st nation to land near the moon's south pole. it's on crude craft touches down safely to j, as in celebration. it's just the days of the process failed. landing on voluminous service from and it's been around remote, he calls it a success. football to monitor also coming up. but still russia, india, china, and south africa use the brakes.