European stocks skidded firmly lower Thursday as trade tensions between the U.S. and China appeared to meet with fresh escalation escalations. with Germany’s main benchmark dragged lower by concerns about the impact of tariff action.Disappointing earnings updates from Siemens AG and BMW AG added to the downbeat mood.

Investors also were bracing for a monetary policy decision from the Bank of England, which is expected to raise interest rates for only the second time in about a decade.

How markets are moving

The Stoxx Europe 600 index SXXP, -0.92% shed 0.6% to reach 387.60, on track for its second consecutive loss. On Wednesday, the pan-European index fell 0.5%, after ending July on a up note.

Germany’s DAX 30 index DAX, -1.71% was by far the biggest loser among major regional indexes, sliding 1.7% to reach 12,519.30 on disappointing financial updates from key names.

The U.K.’s FTSE 100 index UKX, -1.29% dropped 0.8% to 7,588.34, as market participants awaited the BOE decision.

Italy’s FTSE MIB I945, -1.87% was down 1.4% at 21,496.80, while Spain’s IBEX 35 IBEX, -1.23% fell 1% to at 9,701.40. France’s CAC 40 index PX1, -0.88% moved 0.6% lower to 5,465.47.

The euro EURUSD, -0.3602% fetched $1.1622, down 0.3% from $1.1662 late Wednesday in New York.

What’s driving markets

Trade tensions between U.S. and China returned to the fore after President Donald Trump’s administration threatened late Wednesday to raise the proposed tariffs on $200 billion of Chinese goods to 25%, more than double the 10% originally laid out.

Concerns about the possible hit to exporters helped to partly pressure lower Germany’s main benchmark, the DAX.

After the U.S. Federal Reserve on Wednesday released a policy statement seen as somewhat lackluster by analysts, central-bank attention should turn to the BOE Gov. Mark Carney “Super Thursday” trio of releases: its latest interest rate decision, minutes from the meeting and the Quarterly Inflation Report, all due at noon London time, or 7 a.m. Eastern Time.

The bank’s policy makers are widely expected to hike the key lending rate by 25 basis points to 0.75%, though some analysts see a small chance of the bank holding off from a hike. A news conference with Carney is scheduled for 12:30 p.m. London time.

Check out: What to watch in the Bank of England’s ”Super Thursday”

What strategists are saying

“Trade war fears have come back to bite market sentiment, as fears over a new low in U.S.-Chinese trade relations has driven a new bout of selling across global indices. European markets have followed their Asian counterparts lower, and with U.S. futures pointing towards a similarly dour open, there is reason to believe that we will see these trade concerns cloud trading for the rest of the week,” Joshua Mahony, market analyst at IG, said in a note.

Stock movers

Shares of Siemens SIE, -5.22% lost 4.7% after the German conglomerate’s profit fell in the third quarter, hit by underperformance at its oil-and-gas unit, and by a higher tax rate.

Among the other fallers in Frankfurt were BMW shares BMW, -2.25% traded down 2.7%, and those for Hugo Boss AG BOSS, -6.11% slumped by 4.7% after financial updates.

KAZ Minerals PLC KAZ, -20.25% shares led the region’s decliners, declining by 21% on news it will buy the Baimskaya copper project in Russia. Altice Europe NV ATC, -11.12% fell 13.4% after the telecom operator said acquisition costs will limit cash flow in France.

As for advancers, Metro AG B4B, +4.72% gained 4.4% after the German food wholesaler said it expects earnings and sales to rise in fiscal 2018. Rolls-Royce Holdings RR., +3.26% added 2.7% after the aircraft-engine maker boosted its full-year outlook.

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