By Paul Hannon and Todd Buell 

German consumer prices rose at the slowest annual pace in almost five years in November, while prices fell in Spain and Belgium, fueling expectations that the European Central Bank will soon conclude that more aggressive stimulus measures are needed.

In another setback for policy makers, figures also released on Thursday showed bank lending to businesses continued to decline in October, despite a series of measures launched since June designed to increase the flow of credit.

However, there are signs the eurozone economy will continue to grow in the final quarter of a disappointing 2014, albeit at a very weak pace, with German unemployment falling, and eurozone business confidence on the rise.

Recent comments by senior officials have heightened investor expectations that the central bank will start to buy government bonds early next year, embarking on a policy known as quantitative easing that has been used extensively by central banks in the U.S., U.K. and Japan. The ECB has largely resisted, focusing its unconventional stimulus efforts instead on loans to banks and purchases of private debt securities.

ECB President Mario Draghi Nov. 21 put financial markets on alert that the ECB was losing patience with ultralow levels of inflation and was ready to do more.

His deputy, Vitor Constancio, on Wednesday sent the strongest signal to date that the ECB is prepared to buy government bonds early next year if it decides that more aggressive stimulus measures are needed

Germany's statistics agency on Thursday said consumer prices rose 0.5% in the 12 months to November, the smallest increase since February 2010. In Spain, prices fell 0.5% in November from the same month a year ago, after a 0.2% annual drop in October, while Belgian prices also declined, although only slightly.

A measure for the eurozone as a whole will be released on Friday. The consensus forecast of 22 economists surveyed by The Wall Street Journal last week was for a decline in the currency area's inflation rate to 0.3% from 0.4% in October. That would make it the 14th straight month in which inflation was less than half the rate targeted by the ECB, of just below 2%.

With energy prices falling, economists said further declines in the inflation rate are likely in coming months.

"Inflation may head for a new cyclical low close to zero in December," said economist at Commerzbank.

Expectations that the ECB will soon become a buyer created heavy demand for eurozone government bonds Thursday, pushing yields down to their lowest levels since the euro was launched in 1999.

In addition to falling inflation, figures released by the ECB itself indicated the stimulus measures launched since June have yet to boost the flow of credit through the economy.

Compared with the same month a year earlier, bank lending to the private sector continued to fall in October, although at a slightly slower pace than in the previous month. Compared with September, lending to households rose by EUR4 billion ($4.99 billion), while loans to businesses fell by EUR3 billion.

"There is little evidence in this data that the stimulative measures announced by the ECB in June and September are having much positive impact," said Howard Archer, an economist at IHS Global Insight.

Economists say the long decline in lending may be due as much to weak business confidence as a reluctance on the part of banks to provide credit.

A survey released by the European Commission Thursday indicated that business confidence is once again on the rise. Concerns about tensions between the EU and Russia, as well as the weakening economic outlook, saw confidence dip over the summer, but the survey found manufacturers and retailers became more upbeat for the second straight month in November.

While bank lending is weak across the currency area, the German labor market remains strong. The country's labor office reported Thursday that total jobless declined by 14,000 in adjusted terms in November, following a decline of 23,000 in October. The November total was far better than economists' expectations of a decline of 1,000.

"Despite restrained economic growth, the labor market has developed favorably," said the head of the labor agency, Frank-Jürgen Weise.

Another survey released Thursday found German consumers are heading into the Christmas season with increasing confidence. The GfK indicator for December increased to 8.7 in after November's 8.5. GfK uses data from the current month to derive a figure for the coming month.

The survey indicates that while policy makers and economists fret over the threat posed by low inflation to the eurozone's medium-term growth prospects, it may be helping to support consumer spending right now.

"As a result of the extremely low rate of inflation, salary and pension increases are making a real difference to Germans' financial situation," GfK said.

David Román and Emese Bartha contributed to this article.

Write to Paul Hannon at paul.hannon@wsj.com and Todd Buell at todd.buell@wsj.com