Shares fell on Friday after soft U.S. corporate results pulled Wall Street back from record highs, and sterling slumped as the first snapshot of the UK economy since the vote last month to leave the European Union painted a bleak picture.

European stocks and MSCI's leading global share index were both on course for their first consecutive daily losses in two weeks, while Japan's Nikkei posted its biggest decline over the same period. U.S. stock futures pointed to a slightly higher open on Friday.

British purchasing managers data showed manufacturing and services activity plunged in July, a fall consistent with a broader 0.4 percent economic contraction in the third quarter and raising the probability of recession.

"It wasn't exactly a big surprise to see confidence in both sectors take a hit, but what was a concern was the size of the hit to the services sector, the main engine of growth for the UK economy," said Craig Erlam, senior market analyst at Oanda. "If we continue to see these kinds of figures in the coming months, the economy could be headed for recession before the year is out," he said.

The pound fell nearly two cents to $1.31, back to within a couple of cents of the 31-year low struck earlier this month following the June 23 EU referendum. The weaker exchange rate lifted UK stocks up into positive territory and within sight of last week's 11-month high. The FTSE 100 index, which derives most of its earnings from abroad, rose 0.4 percent to 6,727 points. Europe's FTSEuroFirst index of leading 300 shares trimmed earlier losses and was last down just 0.1 percent, while Germany's DAX was flat on the day and France's CAC 40 was up 0.2 percent.

Eurozone private sector growth slowed in July to its weakest in 15 months, according to the euro zone PMI data. "We've seen the ‘Duracell bunny' momentum of the market finally wind down this week, with European and UK exchanges just running out of steam despite fresh record highs in the U.S.," said Chris Beauchamp, senior analyst at IG.

Intel, the world's largest chipmaker, led Wall Street lower on Thursday after it reported slower revenue growth at its data centre business. U.S. stocks are expected to open little changed on Friday.