European stocks retreated, posting the biggest two-day slump in more than four months, as European Central Bank President Mario Draghi said that the economic recovery in the euro area remains subject to downside risks.

Draghi said that risks remain to the euro area’s economic recovery in the second half of this year.

“Weak economic activity has extended into the early part of the year and a gradual recovery is projected for the second half of this year, subject to downside risks,” the ECB’s president said at a press conference in Frankfurt. The central bank left its benchmark interest rate at a record low of 0.75 percent today, matching estimates from 54 of 56 economists in a Bloomberg survey. Two had predicted a cut to 0.5 percent.

In the U.K., the Bank of England’s Monetary Policy Committee held its key rate at a record low of 0.5 percent and maintained bond purchases at 375 billion pounds ($570 billion). Today’s meeting was the first since Chancellor of the Exchequer George Osborne gave the bank more flexibility over how long it takes to meet its 2 percent inflation target. The median estimates in surveys of economists had predicted no change for either policy.

National benchmark indexes declined in 16 of the 18 western-European markets. Germany’s DAX dropped 0.7 percent and France’s CAC 40 lost 0.8 percent. The U.K.’s FTSE 100 Index retreated 1.2 percent.

Banca Generali sank 5.1 percent to 13.85 euros for its longest streak of losses in more than five years. Assicurazioni Generali sold 12 percent of the Trieste, Italy-based private bank for 185 million euros. Italy’s biggest insurer holds a 51.5 percent controlling stake following the transaction.

EADS declined 2.7 percent to 39.25 euros after a term sheet obtained by Bloomberg News showed that Stichting Administratiekantoor Spanish EADS Shares Warehousing Foundation is selling 9.6 million shares in the aerospace company. Two people familiar with the transaction said that the shares were priced at 39.75 euros apiece.

Huhtamaki Oyj fell 2 percent to 15.25 euros. The packaging company said the Finnish Cultural Foundation, a shareholder, sold as many as 2.79 million shares, reducing its stake in the business to less than 15 percent.

BTG rose 1 percent to 362.1 pence. The drugmaker forecast revenue of 230 million pounds in 2013, compared with an earlier prediction of 205 million pounds to 215 million pounds.