The bank's EMU activity indicator showed a monthly increase of a below-trend 0.1 percent, while the rolling quarter indicator suggested that GDP growth slipped to an annualized 0.5 percent rate in the three months ended February, the lowest reading in almost three years.

While the weakness in February "was partly a reflection of bad weather depressing industrial activity, particularly in Germany," there were signs that economic growth would accelerate modestly in the first quarter of 1999, JP Morgan said.

"When the first two months of the year are viewed together ... weather effects boosted January production, improvement from a very weak fourth quarter can be seen," the bank said.

"At present, the activity indicator points to a modest acceleration in GDP growth in the first quarter of 1999 to between 1.5 percent and two percent," it said.

The indicator uses data on industrial production, construction sector confidence, retail and car sales, unemployment and monetary statistics.

The data are released monthly in Germany, France, Italy, Spain and the Netherlands, which account for almost 90 percent of eurozone activity.

J.P. Morgan said the potential for revisions for the first two months of 1999 was particularly large due to technical changes being made to the industrial production series for Germany and Italy.

As a result, these key inputs to the index were based solely on survey evidence for both January and February.

Only when actual data were available, possibly some time in April, would it be possible to assess first quarter performance accurately, the bank said.