Global markets have dropped this morning amid concerns over rates rises, soaring inflation and the threat of prolonged lockdowns in China.
At midday today, the FTSE 100 was down 2.1 per cent and the S&P 500 dropped 2.8 per cent.
In Europe, the Dax slumped 1.7 per cent and the CAC 40 was down 2.4 per cent.
This followed severe falls in Asian markets with the Hang Seng Index crashing 3.7 per cent and the Shanghai Stock Exchange losing 5.1 per cent.
Markets have been dismayed by the speech given by Jay Powell, chairperson of the Federal Reserve, last week where he signalled interest rates will rise quicker than anticipated at the next meeting.
Three half-point rate rises are now being priced in for the next three Fed policy meetings.
There has also been disquiet about the levels of Covid in China.
Despite only 41 cases being reported in Beijing on Saturday and Sunday, residents of the city are panic-buying food amid city health officials ordering more lockdowns and calling the situation “severe”.
Susannah Streeter, senior investment and markets analyst, Hargreaves Lansdown said the “sigh of relief” over the French presidential election is being drowned out by the growing murmurs of discontent about the myriad problems mounting for the global economy.
“Super-hot inflation is settling like an ominous heat cloud over the world’s largest economy, and although a succession of steeper interest rate hikes might blast cold air onto demand, the worry is that the policy could blow up into a recession, which would have knock on effects around the world," she said.