The UK economy shrank by 0.4 per cent in December amid deepening uncertainty about the country’s future after Brexit. Analysts had predicted zero growth for the month.

The latest official data showed GDP suffered a sharp slowdown during the final three months of 2018, expanding by just 0.2 per cent between October and December, down from 0.6 per cent in the previous three months.

Annual growth dropped to a six-year low of 1.4 per cent in 2018, with economists warning the slowdown would likely continue into this year unless a Brexit deal is agreed.

In addition to Brexit, Britain’s economy is also facing a fallout from a trade war between the US and China, and weakness in the eurozone where Italy has fallen into its third recession in a decade.

The services sector, which includes a range of industries from hospitality to accountancy, grew 0.3 per cent over the quarter but manufacturing shrank 0.9 per cent, the Office for National Statistics said.

Britain Before Brexit: Northeast England Show all 12 1 /12 Britain Before Brexit: Northeast England Britain Before Brexit: Northeast England Middlesbrough After midnight, New Year’s Eve. A girl looks at her phone and smokes, framed against a line-up of antiquated postcard features of Britain. She’s the most authentic part of the scene, however, a glimpse of modern Britain, while the red phone box belongs to the past Richard Morgan/The Independent Britain Before Brexit: Northeast England Middlesbrough I walk through a field by the industrial estate where several horses live chained to the ground. They feed on thinning grass. The Transporter Bridge lies in the background: an emblem of movement and motion and crossing divides, like a cruel joke played on the animals, stuck and fixed and static Richard Morgan/The Independent Britain Before Brexit: Northeast England Middlesbrough The first second of 2019, welcomed with with a kiss, a hug, with stares and smiles, with a shot thrown down a throat, with phones and photos and forgetting Richard Morgan/The Independent Britain Before Brexit: Northeast England Middlesbrough Shoes hang from lines of communication, sagging between houses, pulling down on the words and silences that somehow run through these black wires. It reminded me of the view from my bedroom window in Poland Richard Morgan/The Independent Britain Before Brexit: Northeast England Middlesbrough A queue to keep going, into the night, further into 2019 before sleeping. Vape rises distinctly, a new sight on the street in the last few years, bringing atmospheric emissions to the image. There’s sweat and purpose and promise Richard Morgan/The Independent Britain Before Brexit: Northeast England Middlesbrough I’m struck by this naming and shaming, by the identification of supposed disloyalty, clearly marking the public space of the city for all to see, whether they care or not, whether they know or not Richard Morgan/The Independent Britain Before Brexit: Northeast England Hartlepool A view from inside the Market Hall, looking out, onto another person sitting on the street and another person faced with the experience of walking by. Both lower their heads, as if in acknowledgement of the difficulty of the situation Richard Morgan/The Independent Britain Before Brexit: Northeast England Hartlepool I walk to the end of a long jetty by the marina. Fisherman stand at the furthest tip, waiting for a bite, looking to the horizon where faint puffs of smoke appear and vanish from factories further down the east coast Richard Morgan/The Independent Britain Before Brexit: Northeast England Seaham Dwelling spaces of the dead and the living, closer than usual, occupying the same public space, both observable in one view, the burial ground of the local church acting as a garden for the housing estate behind Richard Morgan/The Independent Britain Before Brexit: Northeast England Sunderland A walk by the River Wear is comically framed from the Wearmouth Bridge, a view unavailable to the couple, who probably have no idea they’re walking into shot. Some things just cannot be appreciated at ground level and can only be seen from above Richard Morgan/The Independent Britain Before Brexit: Northeast England Sunderland Somebody once wrote this on a wall. That’s all. But now it’s part of the scene, part of the view, part of the experience of walking up High Street West into town. It’s tiny and anonymous, but noticeable and affecting Richard Morgan/The Independent Britain Before Brexit: Northeast England Sunderland Three elements of the city: a flapping pigeon; an austere grey tower block; purchasable sex Richard Morgan/The Independent

In December alone, output fell in all broad sectors of the economy with construction down 2.8 per cent, manufacturing shrinking 0.7 per cent and services by 0.2 per cent.

A number of firms including Nissan, Jaguar Land Rover and Philips have recently announced plans to produce goods outside Britain.

Airbus last month renewed its warning to the government that it would have to re-evaluate its operations in the UK in the event of a no-deal Brexit.

Investment in the British car industry plunged 46.5 per cent last year as firms hold off making big decisions because of a continued lack of clarity, as well as the uncertainty for diesel cars.

Consumer spending growth, which has been driving the economy, was 0.4 per cent in the final quarter. However, consumer confidence has started to come under pressure with British households £1,500 worse off on average than was forecast before the June 2016 vote to leave the EU.

Households had been supplementing meagre earnings growth by increasing their levels of debt, but consumer credit growth dropped in December.

The Bank of England reported the annual growth of unsecured lending in the month fell to 6.6 per cent, down from 7.2 per cent in November.

This was the weakest figure since December 2014. Credit card lending growth slowed to 7.1 per cent, down from 7.9 per cent the previous month.

A number of economists precisted the slowdown would continue into 2019 unless the government could deliver a degree of certainty about the UK’s trading relationship with the EU.

Suren Thiru, head of economics at the British Chambers of Commerce, said Brexit ucertainty and slowing global growth were “suffocating” economic activity.

He added: “The continued decline in business investment is a blackspot for the economy as it undermines the UK’s ability to raise productivity and increase our long-term growth prospects.

“It is increasingly likely that the slowdown at the end of 2018 will persist as continued Brexit uncertainty and the raised possibility of a no-deal exit from the EU weigh heavily on UK’s growth prospects. Firms are increasingly reporting having to divert staff, money and investment to protect against the chaos of a no-deal Brexit.”

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Paul Dales, chief UK economist at Capital Economics, said the ONS figures support the more downbeat view given by the Bank of England last week.

“But they also suggest there is plenty of scope for the economy to bounce back once the Brexit uncertainty is removed,” he said.