Protectionist threats by the US sent global stocks into the red on Thursday, having sparked jitters over a global trade war.
The FTSE 100 ended the day down 1.2% or 86.38 points at 6,952.59 points, while peers like the French Cac 40 and German Dax slumped 1.4% and 1.7%, respectively.
Wall Street stocks also tumbled, with the Dow Jones Industrial average falling 1.7% and the S&P 500 and NASDAQ Composite down around 1.2% each in the early hours of US trading.
It came as the White House said US president Donald Trump was preparing restrictions on Chinese investment and tariffs to punish Beijing for stealing American technology and putting pressure on US firms.
Fiona Cincotta, senior market analyst at City Index, said: "Trump's announcement that he will place 50 billion US dollars of tariffs on China over IP theft has sent the markets spiralling lower.
"Fears that it could be harmful to the US economy and fears over the potential retaliation from China have left investors rotating out of stocks into less risky bonds."
In currency markets, the pound was down nearly 0.2% against the dollar at around 1.411.
Sterling was lifted earlier in the day by stronger than expected UK retail sales data and news that two of seven Bank of England Monetary Policy Committee (MPC) members voted to hike interest rates - which were ultimately kept on hold at 0.5%.
However, warnings by the MPC that a recent bout of snowfall could impact economic growth in the first quarter compounded worries over US protectionism, sending the pound lower.
Versus the euro, the pound was up just 0.05% at 1.146.
Brent crude prices were hit by profit-taking, with investors cashing in on a strong rise following an unexpected drop in US crude inventories reported a day earlier.
It sent the global benchmark price of oil down 1.2% at around 68.97 US dollars per barrel.