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Consumer prices climbed 1.6 percent in February, the slowest pace since November 1999, the Luxembourg-based European statistics office said in an initial estimate. Business confidence was unchanged in February and consumer confidence rose, European Commission surveys showed.

Economists surveyed by Bloomberg News had expected February inflation of 1.8 percent. Revised figures put January's rate at 1.9 percent, dipping below the ECB's 2 percent limit for the first time since July. Consumer prices fell 0.2 percent in January alone. Final figures and a full breakdown for February will be released March 17.

A business confidence index compiled by the commission, based on a survey of 25,000 companies, was unchanged at minus 6 in February, matching economists' forecast. The January figure was revised from minus 7.

Consumer confidence rose to minus 14 from minus 15. The January figure was revised from minus 16. Economists had expected minus 16 for February.

Growth in the euro region slowed to 0.3 percent in the fourth quarter from 0.4 percent in the third. Exporters such as tiremaker Michelin & Cie and drugmaker Schering AG blame the euro's rise for denting their profits.

So far, Europe's recovery from a second-quarter contraction has been has been led by faster growth overseas. The economy expanded 1 percent in the U.S. in the fourth quarter, 1.7 percent in Japan and 0.9 percent in the U.K., one of three European Union countries not using the euro.