The European Central Bank left its benchmark interest rate unchanged at 4.25 per cent this afternoon, and markets are now waiting to hear President Jean-Claude Trichet's view on whether global financial havoc has affected the rate outlook.
There is growing evidence that the region's economy is suffering after more than a year of financial market turmoil, which has deepened dramatically in recent weeks.
Euro zone unemployment is rising unexpectedly and manufacturing activity is at its weakest since just after the September 11th, 2001 attacks on the United States.
Most analysts expect the problems to pave the way for a rate cut early next year.
Inflation fell to 3.6 percent year-on-year in September, although it remains well above the ECB's 2 per cent threshold. Trichet will explain the reasons for the decision at a news conference at 1.30pm.
Reuters