Live news: Eurozone inflation slows sharply

Economic bellwether UPS said a “mild recession” was now its base case scenario, putting it among a growing group of companies whose executives forecast a slowdown in 2023.

“We expect 2023 to be a bumpy year due to rising interest rates, decades high inflation, recession forecasts, a war in eastern Europe, [Covid-19] disruptions in China and our US labour negotiations,” UPS chief financial officer Brian Newman told analysts on Tuesday.

“We expect a mild recession in the first half of the year, with a moderate recovery in the second half of the year,” Newman continued.

Investors appeared to take the warning, as well as UPS’s forecast that its revenue and operating margin in fiscal 2023 would be lower than last year, in their stride. Shares in the company — regarded as an indicator of global demand owing to the broad range of items it ships around the world — rose 4.5 per cent in afternoon trading.

McDonald’s chief executive Chris Kempczinski on Tuesday reiterated remarks from three months ago and said the forecasts suggested “a mild to moderate recession” in the US and one that would be “a little deeper and longer” in Europe.

Recession risk has been a concern for those in the US housing industry, with higher interest rates putting pressure on mortgage rates and weakening demand.

“Homebuilders are optimists by nature, and I want to believe that the [Federal Reserve] can orchestrate a soft landing, but the risk of a recession is real,” Ryan Marshall, chief executive of home builder PulteGroup, told analysts in a call on Tuesday.