By Shreyashi Sanyal and Johann M Cherian

(Reuters) – European shares fell on Thursday, with tech stocks sliding after the U.S. Federal Reserve delivered another jumbo-sized interest rate hike and signalled more increases in its fight against stubbornly high inflation.

The pan-European STOXX 600 index shed 0.8% by 0817 GMT, while rate-sensitive European tech stocks were down 1.6% and banks up 0.4%.

The Fed raised interest rates on Wednesday by 75 basis points for the third straight time and sees its target policy rate at its highest level since 2008, rising to the 4.25%-4.50% range by the end of this year.

“The FOMC (Federal Open Market Committee) may not fully acknowledge this yet, but they have made it very clear that they will prioritize inflation and Powell is increasingly preparing the market for a not-so-soft economic landing,” said Elwin de Groot, head of macro strategy at Rabobank.

Meanwhile, European Central Bank board member Isabel Schnabel said interest rates need to keep going up as inflation is still far too high, even as the euro zone faces an economic downturn.

The Swiss National Bank joined other central banks in tightening monetary policy to curb rising prices, with a 75-basis-point hike. Stocks in the region were flat.

The STOXX 600 eyed its second straight month of falls as European markets grapple with an energy and cost of living crisis.

A sudden shutdown of Russian gas supply to Europe has also raised fears of the possibility of power rationing and potential blackouts during the winter, with analysts predicting a deeper recession for the euro area.

“In the very short term we are very bearish on euro zone stocks compared to U.S. stocks because they have big risks during the winter in terms of energy and geopolitics,” said Xavier Chapard, strategist at La Banque Postale Asset Management.

London’s FTSE 100 index dropped 0.4% ahead of what will likely be the Bank of England’s second large interest rate hike later in the day.

Travel & leisure stocks also took a 1.6% hit, with French hotel group Accor tumbling 7.0% after J.P.Morgan cuts its rating on the stock to “underweight” on concerns that it will not be able to return to previous level of profitability next year.

Spanish bank Sabadell rose 4.0% after it received indicative bids from France’s Worldline, Italy’s Nexi and U.S. firm Fiserv for its payments arm. Three sources said the deal was valued at up to 400 million euros ($393.64 million).

($1 = 1.0160 euros)