Figures from the Office for National Statistics showed Growth Domestic Product (GDP) grew by 0.2 percent during the final three months of 2018 compared to 0.6 percent in the previous quarter - the lowest level of growth since the start of last year. It will raise eyebrows in the City after economists had forecasted growth of 0.3 percent. Annually, GDP increased 1.4 percent - the weakest it has been since 2012.
Pound Sterling plummeted 0.24 percent against the euro to 1.1405 after opening at 1.1426.
The British currency has suffered a bigger deficit against the US dollar, sliding 0.33 percent to 1.2920 after opening at 1.2946.
The ONS figures revealed car production was down 4.9 in the final three months of last year, marking the biggest decline since the first quarter of 2009.
Total production output fell 1.1 percent, the largest decline since the end of 2012. This included a 0.9 percent dip in manufacturing.
Pound LIVE: Sterling has struggled ahead of the release of vital UK economic data (Image: GETTY)
Construction dropped 0.4 percent in the fourth quarter, following two consecutive quarter of growth during the summer.
Rob Kent-Smith, head of GDP at the ONS, said: "GDP slowed in the last three months of the year with the manufacturing of cars and steel products seeing steep falls and construction also declining. However, services continued to grow with the health sector, management consultants and IT all doing well.
"Declines were seen across the economy in December, but single month data can be volatile meaning quarterly figures often give a better indication of the health of the economy.
"The UK's trade deficit widened slightly in the last three months of the year, while business investment again declined, now for the fourth quarter in a row."
Pound LIVE: The British currency has slumped against the euro this morning (Image: BLOOMBERG)
The thing that worries me most is that the monthly numbers for GDP were dreadful. "The monthly data can be volatile but that does not bode well heading into 2019 with peak Brexit uncertainty
But Kallum Pickering, a UK economist at Berenberg Bank, described the monthly GDP numbers as "dreadful", warning Brexit uncertaintities are continuing to have a huge impact on the outlook for the economy this year.
He said: "The thing that worries me most is that the monthly numbers for GDP were dreadful.
"The monthly data can be volatile but that does not bode well heading into 2019 with peak Brexit uncertainty."
But International Trade Secretary Liam Fox said Britain’s economic slowdown should not be blamed entirely on Brexit.
He told a news conference in Geneva when unveiling details of the new trade deal signed between the UK and Switzerland: "Clearly there are those who believe that Brexit is the only economic factor applying to the UK economy.
“I think you'll find that the predicted