Business sentiment in the euro area dropped once again ahead of an ECB meeting where President Christine Lagarde is expected to raise rates again.Business sentiment in the euro area dropped once again ahead of an ECB meeting where President Christine Lagarde is expected to raise rates again.

The output loss for European business in October was the largest since April.

Higher inflation, particularly from energy costs, has put firms under pressure.

The euro zone's purchasing managers' index fell in October. There is a contraction in activity when the reading is below 50.

Chris Williamson, chief business economist at S&P Global Market Intelligence, said on Monday that the numbers post some downside risk to a lot of people's forecasts.

The European Central Bank said in September that the 19-member bloc is going to grow in the next two years. The central bank expects inflation to be 8.1% this year and 2.3% in the years to come.

Services output fell for a third month in a row.

Business activity in Germany came in at 44.1, which is higher than the previous month's figure. Activity in France was stagnant with a reading of 50.

The economy is getting worse quickly.

The latest data points to a German recession, as the energy shock is hitting the real economy, according to Melanie Debono.

The euro fell against the U.S. dollar and the British pound during the morning in London after the latest Purchasing Managers' Index data.

The euro has been under pressure due to the Federal Reserve and the energy crisis in the euro zone.

The rate is expected to be raised by 75 basis points. In July and September, the main rate in the euro zone increased by 50 and 75 basis points, respectively.

By the end of the year, the main rate is expected to be around 2% because of the expected rate hikes by the European Central Bank.

The question now is whether the ECB can avoid a severe recession, according to Sebastian Galy.

The euro area could go into a recession if policy tightening is aggressive. The Euro area annual inflation was 9.9% in September, the highest on record.

A number of economists are expecting an economic downturn before the end of the year. Gabriel Makhlouf, a member of the European Central Bank, said last week that there was still need for more rate increases.