Mounting fears of a global economic downturn and potential recession pulled the FTSE and other major indexes significantly lower on Thursday.

Andrew Bailey and other central bank bosses did little to calm the nerves of traders preparing for a shaky economy over the coming months.

The governor of the Bank of England starkly warned that inflation will hit Britain harder than any other major economy during the current energy crisis.

The FTSE 100 ended the day down 143.04 points, or 1.96%, at 7,169.28.

Craig Erlam, senior market analyst for UK and Europe at Oanda, said: “Stock markets have fallen heavily in June so it seems only fitting that they’re ending the month with big losses as reality continues to bite.

“There’s no getting away from recession chat and while the heads of the Fed, ECB (European Central Bank) and BoE didn’t exactly fuel that during their panel discussion on Wednesday, they didn’t do anything to dispel it either.

“They all know that there’s a strong likelihood of recession this year or next and investors are increasingly accepting that fate as well.”

Record inflation in France added to woes across the Channel as the major Eurozone markets prepare for the ECB to hike rates.

The German Dax decreased by 1.54% by the end of the session, while the French Cac slid by 1.92%.

In the US, the picture was also downbeat as traders took their cues from falls in European stocks.

Meanwhile, the pound was up 0.22% against the dollar at 1.217 but was down 0.01% against the euro at 1.161 at the close.

In company news, Aston Martin dropped again after the carmaker said it is keeping “funding options under review” following reports Saudi Arabia’s investment arm is in talks to buy a stake in the business.

It came after Autocar reported on Wednesday that the business is seeking to raise new equity in order to shore up its finances and provide cash for investment.

Shares were 38.2p lower at 442p at the close of play.

Telecoms giant BT fell in value after workers at the business voted in favour of strikes in a dispute over pay.

Members of the Communication Workers Union (CWU) at BT and Openreach overwhelmingly backed industrial action.

BT group saw its shares slip by 5.35p to 186.3p as a result.

AIM-listed minnow MySale had a shot in the arm during the session Mike Ashley’s retail empire Frasers continued its buying spree by snapping up an almost 30% stake in the Australian-based fashion marketplace.

MySale closed 0.4p higher at 1.65p after Frasers made the move for an undisclosed sum.

The price of oil also lost ground on Thursday as Brent crude decreased by 0.99% to 115.11 US dollars per barrel when the London markets closed.

The biggest risers on the FTSE 100 were Croda International, up 122p at 6,472p, Bunzl, up 48p at 2,719p, Spirax-Sarco, up 160p at 9,878p, Auto Trader, up 4p at 555p, and WPP, up 4.6p at 824.6p.

The biggest fallers of the day were Anglo American, down 165p at 2,937p, DS Smith, down 15.1p at 277.3p, B&M, down 19.7p at 366.7p, Scottish Mortgage Investment Trust, down 35.2p at 715.4p, and Pershing Square, down 105p at 2,450p.