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Stock markets in Europe and Asia fell Friday as investors became increasingly worried that more interest rate hikes by central banks would tip major economies into a prolonged recession, a media report said.

Hong Kong's Hang Seng Index led the losses, closing 1.7 per cent down. Japan's Nikkei 225 ended the day 1.5 per cent lower and Australia's S&P/ASX 200 shed 1.3 per cent, CNN reported.

Stock exchanges in mainland China were closed for a public holiday.

US stock futures are pointing lower, putting Wall Street on track for a losing week, the report said.

Federal Reserve Chair Jerome Powell said on Wednesday that further rises in interest rates were likely necessary this year to bring US inflation down to the central bank's 2 per cent target.

This was followed by a sharper than expected hike in UK borrowing costs by the Bank of England Thursday, which opted for an increase of half a percentage point after data earlier this week revealed surprisingly stubborn inflation, CNN reported.

And earlier on Friday, data showed that Japanese inflation excluding fresh food and energy costs hit a 42-year high of 4.3 per cent, fueling speculation the Bank of Japan might rethink its loose monetary policy and start tightening.

"The re-acceleration of global monetary policy tightening dampened markets' sentiment across regions," said Ken Cheung, chief foreign exchange strategist for Asia at Mizuho Bank, CNN reported.

Europe's benchmark Stoxx Europe 600 index was flat after dipping earlier in the day. The CAC 40 in France was down 0.3 per cent and Germany's DAX was 0.7 per cent lower.

London's FTSE 100 index slipped 0.2 per cent, adding to losses earlier in the week. It is now on track for its worst week since the US banking turmoil in March, the report said.

The Bank of England's fight against inflation "comes at a potentially high cost to the UK economy, which may slip into recession later this or next year", said Axel Rudolph, a senior market analyst at online trading provider IG, CNN reported.