The FTSE 100 has slid more than 2% lower this afternoon after US markets suffered even sharper losses in early Wednesday trading.
At 3:35pm, London's leading index of shares was 2.07% lower to 5,264.87.
European markets have also suffered strong losses, with the German Dax down 2.01% and the French CAC 40 dropping 2.43%.
TUI Travel is once again leading the losses, falling 6.4% to 190.1p. Lloyds has also been hit hard, down 5.62% to 70.9p.
In the US, markets have opened sharply lower after yesterday's weaker Fed outlook.
The Dow Jones IA has declined 2.02% to 10,429.39; while the broader S&P 500 is 2.29% lower and the tech-heavy Nasdaq has fallen 2.60%.
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