Fund managers have slashed growth expectations due to fears that central banks will take a hawkish view to fend off an increase in inflation, according to Merrill Lynch's latest survey of investor opinion. It is the survey's most pessismistic view of the economy for nearly six years.

Nearly half of the respondents in Merrill's survey expect the global economy to weaken over the next year, against 14% a month ago, with a net 34% of respondents expecting corporate profits to deteriorate, against 9% last month.