Why are stock markets falling and how far will they go?

The FTSE 100 has plunged 10% since May and Wall Street suffered its biggest drop in 8 months this week. What's going on?

A volatile week across global stock markets has escalated into a heavy sell-off, with European stock markets plunging to their lowest level in 20 months on Thursday. In the UK, the FTSE 100 entered correction territory - falling 10% from its peak in May - after Wall Street suffered its biggest drop in eight months on Wednesday.