"Taken with the minutes of the last meeting, this suggests the Monetary Policy Committee will cut rates," said Steven Bell, chief UK economist at Deutsche Bank.
The level of gross domestic product edged up by just 0.1 per cent in the final quarter, revised down from 0.2 per cent. Growth for the year as a whole was a subdued 1.1 per cent.
The figures showed consumer spending keeping the economy from entering outright recession. Household spending was higher than initially estimated, up by 0.6 per cent on the quarter.
However, the gap between the fortunes of consumers and companies grew wider. Stock building by businesses was weaker than originally reported, as was the contribution of trade to growth owing to a 1.6 per cent drop in exports.
The strong pound also contributed to a 2.4 per cent drop in company profits compared with the previous quarter.
Separately, the Office for National Statistics reported a surprise balance of payments surplus in both the final quarter of 1998 and in the year as a whole.
This is the first time since the middle of the 1980s that Britain has been in the black for two years running.
But the underlying trends were less favourable. The deficit on trade in goods climbed to pounds 6.3bn in the fourth quarter, the highest since 1989. Last year's shortfall was the third-highest on record.
In addition, the surplus on trade in services shrank to pounds 2.9bn from pounds 3.5bn in the third quarter, although it reached a record pounds 12.7bn in 1998 as a whole.
The real explanation for the surprisingly good news on the surplus at the tail end of last year was a record surplus on net income from direct investment, resulting from the higher losses repatriated by foreign-owned banks and oil companies. This boosted the balance of payments overall by pounds 7.5bn in the fourth quarter and pounds 18.8bn during the year.
Levels of both outward and inward direct investment reached new highs last year. British companies invested pounds 69bn abroad, up from pounds 38.9bn in 1997. This included the pounds 32.6bn BP acquisition of US oil company Amoco.
Foreign companies invested pounds 38.1bn in the UK, up from pounds 22.6bn in 1997. But the pace of inward investment into Britain slowed sharply in the final quarter of last year.Reuse content