UK’s FTSE 100 fell on Thursday after Federal Reserve Chair Jerome Powell’s comments doused hopes for a pause in its aggressive monetary policy tightening, while investors also geared up for another big rate hike from the Bank of England.

The blue-chip FTSE 100 fell 0.9%, extending losses from the previous session, while the mid-cap FTSE 250 shed 0.8% by 0802 GMT.

European markets were broadly lower after the Fed opened its doors to a slowdown in the pace of hikes after raising interest rates by 75 basis points on Wednesday, but Powell soured the mood by saying it was “very premature” to think about a pause.

Meanwhile, the BoE is expected to undertake its biggest rate hike since 1989 at 1200 GMT as it battles the highest inflation in four decades.

FTSE 100 steady, midcaps fall ahead of key Fed meeting

UK’s energy stocks slipped 0.8% after the Times reported that British Prime Minister Rishi Sunak and Finance Minister Jeremy Hunt were planning to extend windfall taxes on oil and gas companies to raise nearly 40 billion pounds ($45.55 billion) over five years.

Oil prices also slid about 1% as the US interest rate hike pushed up the dollar.

BT fell 4.4% after the broadband and mobile operator increased its savings target by 500 million pounds to help fund the rising cost of building its fibre network, and met earnings forecasts in the first half.

Britain’s second-biggest supermarket group, Sainsbury , rose 1.4% after it retained its financial guidance for this year.