European shares slip as recovery fades after US rate hike

European shares fell on Thursday after the US Federal Reserve’s decision to raise interest rates bolstered fears of a possible recession at a time when global economies are facing soaring inflation.

The pan-European Stoxx 600 index was down 0.4 percent by 0710 GMT, although European stock futures recovered overnight after Wall Street rose to close higher.

The retail sector was the lowest, down by 2.1 percent, with Asos, the British online clothing retailer, declining by 14.3 percent, after it warned that inflationary pressures were affecting shopping trends.

Shares of German rival Zalando lost 7 percent.

On Wednesday, the Federal Reserve raised the interest rate by 75 basis points, the largest increase since 1994, and predicted a slowdown in the economy and an increase in unemployment in the coming months.

Britain’s FTSE 100 index fell 0.5% before the Bank of England monetary policy meeting, which is expected to raise interest rates again.

Shares in Swiss drugmaker Roche fell 0.6 percent after it said its Alzheimer’s drug, crenezumab, did not slow or prevent cognitive decline in patients.