The European Central Bank has kept interest rates steady at 4%, in a move widely accurately predicted by markets.
The last reading of the eurozone manufacturing purchasing manager's index (PMI) was 43, on a scale where readings below 50 indicate deteriorating conditions, while consumer sentiment is also in negative territory.
Inflation, meanwhile, slowed to 4.3% year-over-year in September, from 5.2% in August.
"Inflation is still expected to stay too high for too long, and domestic price pressures remain strong," the ECB said.
"At the same time, inflation dropped markedly in September, including due to strong base effects, and most measures of underlying inflation have continued to ease."
it added past rate hikes were being transmitted "forcefully" into financing conditions, which is dampening demand and pushing down inflation.
"Based on its current assessment, the governing council considers that the key ECB interest rates are at levels that, maintained for a sufficiently long duration, will make a substantial contribution to this goal.
"The governing council's future decisions will ensure that its policy rates will be set at sufficiently restrictive levels for as long as necessary," the ECB said.
The Bank of England is due to meet next Wednesday to make its next decision on UK interest rates, with an announcement on Thursday.
By Steve Goldstein. This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal