Following the sharp downturn in the USA, signs of weakening activity are also becoming more frequent in Europe. In the euro area, industrial confidence and consumer sentiment are on a downward trend, and money supply growth is decelerating. For the time being, the ECB has not relaxed monetary conditions, despite inflation subsiding and the gap between short and long-term interest rates virtually closed. Latest data for the euro area reaching into the winter months do not, however, suggest a downright slump in economic activity.