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The pan-European STOXX 600 index fell 0.6% by 0707 GMT, with retail and mining stocks among the biggest losers.
Investors remained on edge ahead of the U.S. Federal Reserve’s annual symposium on Friday, when chair Jerome Powell’s speech is likely to offer hints on plans to taper its stimulus programme.
Earlier, South Korean central bank lifted its base rate off a record low, the first major economy in Asia to do so.
A survey showed the mood among German consumers darkened heading into September as accelerating inflation and rising COVID-19 cases made them more hesitant to buy.
Germany’s blue-chip DAX dropped 0.8% to its lowest level in almost a week, while UK’s FTSE 100 and France’s CAC 40 declined 0.6% each.
DWS Group fell 8.9% on a report U.S. authorities were investigating German lender Deutsche Bank (DE:DBKGn)’s asset management arm over sustainability claims.
France’s Vivendi (OTC:VIVHY) rose 2.4% after its unit Universal Music Group said it expects further revenue growth this year and it aims to pay out dividends once it lists in Amsterdam.
