Stock markets are falling at their fastest rate since the UK's Brexit referendum result as investors fret that central banks around the world are easing up on their monetary stimulus policies and concerns grow about the health of Hillary Clinton and the implications for the US Presidential election in November.

The FTSE 100 has fallen 1.6 per cent and is now trading at its lowest level since the beginning of last month.

Almost every company in the UK blue chip benchmark index is down.

Shares in Europe are also sharply lower, with the German Dax and France's CAC both off by 2 per cent.

Italy’s MIB is trading 2.6 per cent down on last week’s close.

Markets are on course for their biggest daily falls since the 24 June sell-off immediately after a majority of the UK electorate voted to quit the European Union.

Stock markets in Asia were hit hard overnight, with Korea’s main index closing down 2.28 per cent and Japan’s Nikkei 225 down 1.73 per cent.

Hong Kong's Hang Seng index dropped 3.4 per cent - its biggest fall since February.

“Investors [are reacting] to heightened fears about, firstly, a Fed rate hike next week and and what it means for diverging global monetary policy, and, secondly, a new layer of political event risk as questions are asked about the health of Hillary Clinton and what that means for an already 'interesting' US presidential race set to conclude in just months” said Mike van Dulken of Accendo Markets.

The US Democratic presidential candidate Hillary Clinton has cancelled a two day campaign trip to California after being diagnosed with pneumonia and seeming to stumble at the weekend's 9/11 commemorations in New York.

"Some are worried that this could ultimately end her bid for the presidency if she doesn’t recover swiftly" said David Cheetham of XTB.

FTSE 100 lowest since early August

Reuters Eikon

Concerns over the direction of central bank policy were first stoked last week when a normally dovish member of the Federal Reserve board, Eric Rosengren, last Friday said there was a “reasonable case” for an increase in US interest rates later this month.

The Fed's meeting on 20-21 September will be the penultimate gathering before the US presidential election on 8 November

Also last week the President of the European Central Bank, Mario Draghi, said the ECB’s council had not even discussed extending its Quantitative Easing programme in its latest meeting, despite stubbornly subdued consumer price inflation in the eurozone.

Many financial market traders were caught off guard by both comments, prompting a shares sell-off.

Last Friday America's S&P 500 experienced its largest fall since late June, closing down 2.45 per cent.

Business news: In pictures Show all 13 1 /13 Business news: In pictures Business news: In pictures Flybe collapses Airline Flybe has collapsed. All future flights on the Exeter-based airline have been cancelled – leaving more than 2,300 staff facing an uncertain future, and wrecking the travel plans of hundreds of thousands of passengers. The chief executive, Mark Anderson, said: “Europe’s largest independent regional airline has been unable to overcome significant funding challenges to its business. AFP via Getty Business news: In pictures Future product placement will be 'tailored to individual viewers' Marketing executives say that product placement in films and televison shows on streaming services such as Netflix may be tailored to individuals in future. For instance, if data shows that a viewer is a fan of pepsi, a billboard in the background of a shot would host an advert for pepsi, while for a viewer known to have different tastes it could be for Coca-Cola Paramount Business news: In pictures Corbyn wishes Amazon a happy birthday In a card sent to Amazon CEO Jeff Bezos on the company's 25th birthday, Labour leader Jeremy Corbyn writes: "You owe the British people millions in taxes that pay for the public services that we all rely on. Please pay your fair share" Business news: In pictures No deal, no tariffs The government has announced that it would slash almost all tariffs in the event of a no-deal Brexit. Notable exceptions include cars and meat, which will see tariffs in place to protect British farmers Getty Business news: In pictures Fingerprint payment NatWest is trialling a new bank card that will allow people to touch their hand to the card when paying rather than typing in a PIN number. The card will work by recognising the user's fingerprint NatWest/PA Wire Business news: In pictures Mahabis bust High-end slipper retailer Mahabis has gone into administration. 2 Jan 2019 Mahabis Business news: In pictures Costa Cola Coca-Cola has paid £3.9bn for Costa Coffee. A cafe chain is a new venture for the global soft drinks giant PA Business news: In pictures RIP Payday Loans A funeral procession for payday loans was held in London on September 2. The future of pay day lenders is in doubt after Wonga, Britain's biggest, went into administration on August 30 PA Business news: In pictures Musk irks investors and directors Elon Musk has concluded that Tesla will remain public. Investors and company directors were angry at Musk for tweeting unexpectedly that he was considering taking Tesla private and share prices had taken a tumble in the following weeks Getty Business news: In pictures Jaguar warning Iconic British car maker Jaguar Land Rover warned on July 5, 2018 that a "bad" Brexit deal could jeopardise planned investment of more than $100 billion, upping corporate pressure as the government heads into crucial talks AFP/Getty Business news: In pictures Spotif-IPO Spotify traded publically for the first time on the New York Stock Exchange on Tuesday. However, the company isn't issuing shares, but rather, shares held by Spotify's private investors will be sold AFP/Getty Business news: In pictures French blue passports The deadline to award a contract to make blue British passports after Brexit has been extended by two weeks following a request by bidder De La Rue. The move comes after anger at the announcement British passports would be produced by Franco-Dutch firm Gemalto when De La Rue’s contract ends in July. The British firm said Gemalto was chosen only because it undercut the competition, but the UK company also admitted that it was not the cheapest choice in the tendering process. Business news: In pictures Beast from the east economic impact The Beast from the East wiped £4m off of Flybe’s revenues due to flight cancellations, airport closures and delays, according to the budget airline’s estimates. Flybe said it cancelled 994 flights in the three months to 31 March, compared to 372 in the same period last year.

Shares suffered major falls in the wake of the unexpected Brexit vote on 23 June - but recovered well in the subsequent weeks as the shock abated.

On Friday 24 June the FTSE 100 fell 3.15 per cent and 2.55 per cent the following Monday.

Biggest fall since Brexit vote

Reuters Eikon

The stock market falls elsewhere were even larger.

On 24 June Germany's DAX lost 6.82 per cent, France's CAC fell 8.04 per cent and Italy's MIB fell 12.48 per cent.

The S&P 500 lost 3.59 per cent and the Nikkei 225 fell 7.92 per cent.

John Nelson, chairman of Lloyd's, speaks on Brexit

"There are signs the post-Brexit 'golidilocks' backdrop of better growth data and falling rates may be turning and investors do not seem positioned for it" said Keith Parker of Barclays.