European shares dropped to a near three-month low on Thursday as uncertainty surrounded the Bank of England’s (BoE) interest rate hike. The pan-European STOXX 600 index fell by 1.0% and the UK’s FTSE 100 index shed 0.9% due to fears of continued monetary policy tightening by major central banks. The BoE is set to raise interest rates for the thirteenth time in a row, following higher than expected inflation data. Michael Hewson, CMC Markets UK’s chief market analyst, stated that the inflation readings were very worrying and raised the stakes for a potential 50-basis-point hike, instead of the expected 25-basis-point hike. The Swiss National Bank also raised its policy interest rate by 25-basis-points on the same day, with potential further tightening in the future. Some European Central Banks’ policymakers have expressed concerns that euro zone inflation is stubborn and may require high interest rates for a prolonged period. The European auto sector and bank stocks tumbled, and technology shares dropped. Novo Nordisk shares slipped as a result of a thyroid cancer safety signal, while Ocado Group soared due to reports of bid interest. SES SA rose after ceasing merger talks with Intelsat. The STOXX 600 is on track for a lackluster end to June, losing momentum from the first quarter of the year. This is due to high interest rates, a shift in investor preferences away from value-oriented stocks, and a disappointing China recovery.