The British economy has avoided a contraction in the fourth quarter of 2019. This is further evidence of the gradual recovery of activity after Boris Johnson won the December election. The country’s gross domestic product remained unchanged from the third quarter in line with economists’ expectations.

British annual economic growth slowed to 1.1% in the fourth quarter of 2019 from a revised 1.2% in the previous period, still beating market expectations of 0.8 %, a preliminary estimate showed. This is the slowest growth rate since Q1 2018.

Production increased by 0.3% in December. However, on an annual basis, the country’s industrial production declined by 1.8%.

Signs of a resurgence in activity following Johnson’s victory in the parliamentary elections contributed to the decision of the Central Bank of Great Britain’s leadership not to cut institutional interest rates last month, although uncertainty is expected to continue.

Boris Johnson, who fulfilled his promise to separate the UK from the European Union on January 31st, is now facing potentially difficult negotiations with the EU on a new trade deal. The deadline for reaching this agreement continues until the end of this year. Otherwise, the UK will face complete disruption to its largest trading partner.

In the fourth quarter of 2019, consumer spending increased by only 0.1%, accounting for its slowest growth since the end of 2015. In the meantime, business investment fell by 1%, registering the largest decline since the end of 2016.

The economy has received some support from net trade due to higher exports. At the same time, government spending has seen its biggest increase since 2012.

Economists forecast growth of about 0.3% in the first quarter of 2020 and greater acceleration over the rest of the year due to increased fiscal stimulus.