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European shares briefly hit their lowest level in nearly three months on Thursday, with London stocks falling after a bigger-than-expected rate hike by the Bank of England (BoE) .

The pan-European STOXX 600 index closed 0.5% lower, after falling as much as 1.3% earlier in the day, on fears of continued monetary policy tightening by major central banks.

Britain’s FTSE 100 index shed 0.8% after the BoE announced a jumbo half-point rate hike to 5%.

“Tackling inflation remains the firm commitment for the BoE, while consumers are getting squeezed from both ends of the spectrum – with the cost-of-living crisis at one end and higher mortgage premiums at the other end due to the rate rises,” said Richard Flax, chief investment officer at Moneyfarm.

Limiting losses on the UK benchmark index, Ocado Group soared 32.0% after The Times reported possible talk of bid interest in the company.

Meanwhile, the Swiss National Bank and Norges Bank also hiked their benchmark rates, underscoring fears about global inflation, while Powell, in his second day of testimony to lawmakers, said interest rate cuts must wait until he was confident inflation was moving down to 2%.

Some European Central Banks’ (ECB) policymakers echoed the sentiment on Wednesday, saying euro zone inflation is stubborn and may require a protracted period of high interest rates to contain, partly due to an exceptionally tight labour market.

Bank stocks tumbled 1.9%, eying their worst session in nearly a month.

“One of the things to consider with banks is the inverted yield curve,” Flax said.

“If they’re being forced to effectively borrow short and lend long, that inverted curve makes life harder for them.”

Real estate stocks extended losses for fourth consecutive day, down 1.3%.

The STOXX 600 is now on track for a lacklustre end to June, losing momentum from the first quarter of the year as high-interest rates catch up, investor preferences moves away from value-oriented stocks, and a disappointing China recovery.

The European auto sector slid 1.2%.

U.S. lawmakers on Wednesday urged the Federal Trade Commission to finalise new consumer protections for car buyers despite objections from auto dealers who argue the rules would actually raise the cost of buying a car.

SES SA rose 7.8% after it said it ceased merger talks with Intelsat.

Novo Nordisk slipped 0.7% as it said the European Union’s drug watchdog last month raised a thyroid cancer safety signal for several of its drugs.

Deutsche Bank is drawing up plans to cut 10% of its 17,000 German retail jobs over the next few years as part of cost savings, a person with knowledge of the matter said on Thursday. Shares of the company slid 1.4%.

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