European stocks fell Thursday as investors digested cautious economic guidance from the European Union and the Bank of England.
The pan-European Stoxx 600 closed provisionally down 1.36 percent, with all sectors and major bourses in negative territory.
The EU slashed its growth outlook for the euro zone this year as it expects the bloc's largest economies to be held back by global trade tensions, among other issues. The bloc said euro zone growth will slow to 1.3 percent this year from a previously forecast 1.9 percent.
Over in the U.K., the Bank of England cut its growth and inflation forecasts. The central bank projected the weakest economic outlook for the U.K. economy since 2009. This is on the back of Brexit uncertainty as well as a slowdown in the global economy. Nonetheless, the bank stated that a gradual and limited rate hiking path lies ahead.
Sterling initially fell following the U.K. central bank's decision, but later turned course, rising 0.3 percent against the dollar.
Comments from White House economic advisor Larry Kudlow on U.S.-China trade talks later into the session added to downside pressure on equities.
On Wall Street, stocks fell as Kudlow said in an interview with Fox Business that the U.S. had a "pretty sizable distance to go" before reaching a trade agreement with China. Stocks fell sharply off the back of that report.
Officials from the world's two largest economies poised to meet for a fresh round of talks next week.
U.S. Treasury Secretary Steven Mnuchin said on Wednesday trade representatives from Washington and Beijing would both aim to reach a deal next week. The talks come with less than three weeks to go before a March 2 deadline could see an increase in U.S. tariffs on Chinese products.
Trader sentiment stateside was also damaged by fears of a slowdown in global economic growth.
Europe's auto stocks were the worst performers Thursday on the back of earnings news. Fiat Chrysler plummeted 12 percent after the carmaker posted softer-than-expected profit guidance. The firm said it expects to report 2019 earnings before interest and tax (EBIT) of more than 6.7 billion euros — below an expected 7.3 billion euros.
Looking at individual stocks, U.K. medical products maker Smith & Nephew surged to the top of the Stoxx 600 after its earnings report showed revenue growth in line with analysts' expectations. The firm also said Brexit would not have any "significant impact" on its long-term ability to conduct business in the region. The stock rose 5.7 percent.
Meanwhile, Britain's Tui slumped to the bottom of the index. It comes after the tour operator cut its profit outlook on Thursday. Shares of the London-listed stock tumbled almost 19 percent.
In Brexit news, European and U.K. negotiators have agreed to have further talks in the coming days to find a compromise over the so-called Irish backstop.
European Commission President Jean-Claude Juncker and U.K. Prime Minister Theresa May agreed to meet again before the end of the month to taking stock of the Brexit process. The U.K. is currently scheduled to leave the EU in 50 days.