European stocks slump as World Bank warns of 'exceptional uncertainty'

World Bank chief economist Carmen Reinhart warned that the global economy is passing through a period of "exceptional uncertainty". Citing an "array of disruptions" from lockdowns in China to soaring food prices amid the war, adding she wouldn’t rule out further cuts to the growth outlook.On Monday, the Washington-based institution slashed its global growth forecast for 2022 by nearly a full percentage point, to 3.2% from 4.1%, due to the added economic stresses from the Ukraine crisis. It is preparing a $170bn (£131bn) financial aid package in response to the coinciding global crises of war, pandemic and inflation that are hitting the poorest nations the hardest, president David Malpass said.Meanwhile, the International Monetary Fund (IMF) downgraded UK's economic growth forecast to 3.7% for 2022 from 4.7% predicted in January. It also slashed its global growth estimate from 6.1% in 2021 to 3.6% in 2022 and 2023.Analysts have warned of "growing concerns" of global recessions as growth outlooks are cut."Rising interest rates at a time when economic activity is slowing down makes for very difficult conditions, which aren’t lost on the financial world," said Sophie Lund-Yates, lead equity analyst at Hargreaves Lansdown. "The US reaction has so far been muted, although this of course follows two weeks in the red for European and US stock markets.""Asian markets have also suffered, with Hong Kong equities facing the brunt of supply chain disruption, following China’s zero-COVID approach."Sterling (GBPUSD=X) has dropped below $1.30 in its fourth straight day of losses against the dollar amid interest rate jitters and ahead of a speech by Bank of England governor Andrew Bailey on Thursday.