(Adds details, background, analyst comment)
BRUSSELS, Feb 24 (Reuters) - Belgian business confidence, a bellwether for the euro zone, fell to a record low in February because manufacturing sentiment sharply worsened, compounding pressure on the European Central Bank to cut rates further.
The business confidence index, often referred to as the leading indicator, dropped to -31.6, its lowest level since records began in 1980, from -27.7 in January, the central bank said on Tuesday.
A Reuters poll of 16 economists had produced a median forecast for a slight rise to -26.8, with a range from -32 to -20.
Germany's closely watched Ifo business climate index, released earlier on Tuesday, also plunged to its lowest level since the country's reunification in 1990. [ID:nLO471045]
Economists said the gloom among business leaders was no surprise and confirmed that a modest pick-up in January was more of a temporary blip.
Steven Vanneste at Fortis said a recovery would only happen when financial markets stabilised.
The slight recovery of trade sentiment in February was also attributed to a buoyant sales period at the start of the year.
Philippe Ledent, economist at ING, said the new business confidence figure implied negative growth of 0.6 percent this quarter after a 1.3 percent quarter-on-quarter contraction in the last three months of 2008, confirming a recession.
"There is only one possible conclusion. It is clear that the ECB, after its non-decision in February, will now go further with monetary easing and cut by 50 basis points in March. This is our analysis." (Reporting by Philip Blenkinsop and Antonia van de Velde; Editing by Ron Askew)