European stocks are sliding sharply this morning, and U.S. futures are indicating that its markets may not be far behind.

Traders are worried that a global recession is certainly in the cards, despite the recent string of global interest rate cuts.

The Bank of England was the latest central bank to join the rate cutting tide this morning. It dropped rates 25 basis points to 4.75%, a 40-year low.

Nevertheless, in London the FTSE is down 110 points to 4,789. In Paris, the CAC 40 has surrendered 102 points to 3,913. Germany’s DAX has dropped 97 ticks to 4,137.

There’s some economic news out in the U.S. today, although traders have given it little weight, preferring to listen to the latest news of tensions with Afghanistan.

The U.S. Consumer Price Index came in up 0.1% in August, and 0.2% on the core rate, in line with expectations. Higher energy costs led the way, and they are expected to stay high.

In Canada, it was reported that the CPI rose 2.8% in August, up from 2.6% in July. The increase in the CPI was driven by the renewed impact of energy prices, which accounted for about 16% of the All-items increase. The CPI excluding energy rose 2.6% in August. The core rate was up 0.2% to 2.2%, and the Bank of Canada’s new All-Items index rose 0.1% to 2.3%.

Overnight in Asia, markets were mixed. The Bank of Japan cut borrowing costs and will pump more money into the economy to boost investor and consumer confidence. It was also reported that the Nomura Research Institute Ltd. canceled its plans to sell as much as US$1.4 billion of shares, citing the destabilizing effect of terrorist attacks in New York. Still, the Nikkei rose 175 points to close at 9,680. In Hong Kong, the Hang Seng dropped just 11 points to 9,308.

In other news, Commerzbank AG, Germany’s fourth-biggest bank, said it’s considering cutting 10% of its workforce, or 4,000 jobs, to cut expenses.

In M&A news, Bowater and Alliance Forest Products Inc. announced that the Antitrust Division of the U.S. Department of Justice has approved their deal.

Fahnestock & Co. Inc. has acquired all of the outstanding shares of Josephthal & Co. Inc. for an undisclosed price.