The Bank of England kept interest rates unchanged and cut its UK growth forecasts, however its commitment to continuing gradual increases in rates helped boost sterling.
A stronger pound is bad for the FTSE 100 as it impacts the relative value international sales when converted into sterling, and the blue-chip index fell 1.1% to 7,093.
There was a sea of red in Europe with Germany's DAX falling 2.7% to 11,022. Wall Street did not fare much better as the Dow Jones declined 1.2% to 25,077 at around 5pm UK time.
Brent crude oil slid 2.3% to $61.22 per barrel.
LARGE AND MID CAP RISERS AND FALLERS
Travel operator TUI fell 17.1% to 981.2p after warning on profit last night blaming the impact of the weak pound on the purchasing power of UK holidaymakers.
Rival Thomas Cook jumped 10% to 34.1p after it announced a strategic review of its airline business on Thursday and reported a £14m increase in operating loss in the first quarter of its financial year.
UK food producer Cranswick slumped 12.6% to £25.90 after warning margins are likely to decline due to a difficult retail backdrop and rising poultry factory start-up costs.
Housebuilder Bellway slipped 3.2% to £27.97 as it said early signs pointed toward a strong spring selling as the homebuilder sold more homes at higher prices amid ongoing demand for new housing. The company warned, however, Brexit uncertainty could hurt consumer confidence.
Catering giant Compass Group added 3.6% to £17.58 after it upgraded its full-year outlook, expecting organic growth to come in slightly above the middle of its guidance as strong levels of new business wins bolstered first-quarter revenues.
British medical equipment manufacturer Smith & Nephew climbed 5.7% to £15.45 as it posted a small increase in revenue in its full-year results on Thursday and said it did not anticipate any significant impact on its business from Brexit.
Fashion retailer Superdry advanced 0.8% to 512.5p lower after it said in-store and online sales were "subdued" in the third quarter, due to the unseasonably warm weather and problems with its mix of products.
Insurer Beazley climbed 5.2% to 520p despite reporting Thursday that annual profits had more than halved as underwriting losses in its property insurance and reinsurance division offset a rise in gross premiums written.
Cranswick slumped 12.6% to £25.90 as it said Thursday revenue fell 2% over the festive period, and warned margins would come under pressure amid a 'challenging' retail backdrop.
IT services group FDM slid 1.5% to 788p as it said Thursday it had appointed David Lister as non-executive chairman with effect from 5 March 2019.
Holiday operator On the Beach rose 4.2% to 458.6p on a 20% jump in sales in the first four months of its financial year.
SMALL CAP RISERS AND FALLERS
Crimson Tide leapt 5.8% to 2.7p after it announced two contract wins in the rail sector worth nearly £0.25m for the company's mpro5 service offering.
Data analytics company Ixico lost 11.4% to 31p as it announced on Thursday it had appointed Grant Nash as chief financial officer.