The Stoxx 600 fell 2.8% in afternoon trading, with all sectors and major exchanges trading in the red.
Oil and gas inventories and basic resources were the biggest losers, both down more than 4%.
Thursday’s market move came after the UK government announced a series of tax cuts in preparation for a recession. Following this news, Sterling fell his 1.8% against the dollar around noon, trading at $1.1048.
The Bank of England also raised interest rates by 50 basis points on Thursday.
Also on Thursday, the Swiss National Bank lowered its benchmark interest rate to 0.5%, a shift that would end the era of negative interest rates in Europe.
Meanwhile, the US Federal Reserve hiked rates by another three-quarters of a percent on Wednesday, signaling the continuation of rate hikes.
US stocks closed lower on Thursday, falling for a third day in a row, and futures also fell on Friday.
Meanwhile, Asian markets were in the red and Australian shares fell 2%.