PARIS: European shares fell almost 2% on Wednesday, as investors grappled with the twin worries of aggressive US interest rate hikes potentially hurting growth and more Western sanctions on Russia further stoking inflation.

Breaking a three-day winning streak, the pan-European STOXX 600 index fell 1.5% to log its worst day in nearly a month. Losses were broad-based, with technology and travel stocks the biggest drags.

US Federal Reserve Governor Lael Brainard said on Tuesday she expected interest rate rises and a rapid balance sheet runoff to take US monetary policy to a “more neutral position” later this year. Her comments sparked a global selloff.

“Markets are responding to an anticipated faster, steeper tightening in US monetary policy than previously considered... The Fed appears willing to tolerate any impacts such a move may have on growth and stock markets - European indices are all losing ground,” said Stuart Cole, head macro economist at Equiti Capital.

Adding to the pessimism were fears around rising inflationary pressures yet to be felt from the war, Cole added.

The US announced a new round of sanctions targeting Russian banks as well as Kremlin officials and their family members on Wednesday, while the EU proposed to ban Russian coal and even oil imports on Tuesday.

Further fuelling concerns about slowing growth, data showed German industrial orders fell more than expected in February on weaker demand from abroad.