(Bloomberg) -- European shares fell on Monday in a broad risk-off move ahead of policy meetings by the US Federal Reserve and the Bank of England this week amid worries that interest rates will remain high for longer than previously expected.  

The Stoxx 600 Index was 1.1% lower by the close in London, with all industry subgroups trading in the red. Societe Generale SA declined by the most since March 2020 after the bank’s new strategic plan disappointed investors, while Nordic Semiconductor ASA slipped after the chipmaker reduced quarterly revenue and margin forecasts. And, Lonza Group AG shares had their worst day in eight years after the Swiss bioprocessing company announced the departure of CEO.

The retreat in the main regional benchmark comes after it recorded the biggest weekly advance in two months. Beyond nervousness about central bank moves this week, there are renewed fears about the health of the Chinese property sector, which dented Hong Kong stocks earlier in the day. 

April LaRusse, head of investment specialists at Insight Investment, said “the Fed or any other central bank this week will leave as much wiggle room as possible in terms of forward guidance.” 

“In terms of cuts next year, we’re thinking ‘why rush unless the economy is actually contracting?’” she said in an interview with Bloomberg Television. “There would be no reason to start cutting until the second half of next year.” While growth could stagnate and possibly contract, “it’s not going to be a 2008-sort of slowdown or anything like that,” she added.

Economists anticipate no change in rates at the Fed’s meeting this week, but say there is potential for officials to pencil in one more move later this year.

Meanwhile, European Central Bank Governing Council member Martins Kazaks said that betting on the bank cutting interest rates in the first half of next year would be a mistake. At the same time, prominent economist Nouriel Roubini warned the European Central Bank and the Bank of England must keep raising interest rates to ward off “stagflation.”

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--With assistance from Michael Msika.

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