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Euro zone economic sentiment eased marginally in February against January, defying market expectations of a small rise and adding to concerns about the sustainability of a recovery in the economy.

Sentiment in the 16 countries using the euro eased to 95.9 points from 96.0 in January against market expectations of a rise to 96.2, the European Commission said as pessimism among households and retailers offset gains in industry and services.

"The relapse ... in overall euro zone economic sentiment in February adds to the current heightened concerns over the strength and sustainability of the euro zone's recovery from recession," said Howard Archer, economist at IHS Global Insight.

Sentiment in industry improved to -13 from -14 points and in the services sector to +1 from -1.

But the mood deteriorated to -17 from -16 among households and to -9 from -5 in the retail sector.

"The combination is consistent with underlying weakness in consumer demand, one of the main factors underlying our scepticism on a strong and sustainable recovery," said Luigi Speranza, economist at BNP Paribas.

"Note, however, that unusually cold weather may have played a part, exacerbating the underlying trend," he said.

The Commission said that after 10 months of uninterrupted improvement in sentiment, the rebound appeared to have lost momentum but the indicator was not far off its long-term average, especially for the 27-country European Union.

The indicator of consumer inflation expectations, which the European Central Bank monitors for its policy decisions, rose to 0 from -2 in January, suggesting households no longer expected prices to fall but did not see them rising either.

In industry, selling-price expectations increased to -4 from -6, but they deteriorated to -9 from -6 in the retail sector.

The Commission's business climate indicator, which points to the phase of the business cycle, rose to -0.98 in February from -1.13 in January.

"Firms' selling-price expectations rose in February, but they were still extremely low by historical standards. Consumer price expectations 12 months ahead, albeit increasing, were also very low," said Clemente de Lucia, economist at BNP Paribas.

"With low inflationary pressures and a still fragile recovery, the ECB is likely to leave the refi rate unchanged until 2011.”