PARIS: Tech led European shares lower on Wednesday following hawkish signals from Federal Reserve Chair Jerome Powell, while real estate stocks slid as the prospect of more interest rate rises stoked fresh concerns about mortgage costs after UK inflation failed to slow down in May. The continent-wide STOXX 600 index closed 0.5% lower, extending declines to the third consecutive session.

Fed Chair Powell told lawmakers that the fight against inflation still “has a long way to go” and despite a recent pause in rate hikes officials were in agreement borrowing costs would likely still need to move higher.

Rate-sensitive tech stocks shed 1.6%.

In Britain, the consumer price index defied expectations of a slowdown and held at 8.7% in May. The data comes a day before the Bank of England’s policy meeting, where it is forecast to raise rates for a 13th time in a row.

“Given a string of upside surprises in the data showing stubbornly high inflationary pressures and surprisingly strong wage growth, we flag significant upside risk to our call, with the Bank potentially continuing the hiking cycle beyond the August meeting,” said Anna Titareva, an economist at UBS.