BREXIT uncertainty has helped suppress UK growth to its worst level since the financial crash, Philip Hammond has admitted as Theresa May prepares today to give a Commons update on Britain’s withdrawal from the EU.

The Chancellor suggested the crisis over Britain’s pending departure from the Brussels bloc was “overshadowing” the performance of the country’s economy but stressed how the 2018 data showed it remained "fundamentally strong" and that he did not foresee a looming recession.

The Office for National Statistics said growth fell to 0.2 per cent between October and December; put down, among other factors, to falls in factory output and car production. This compared to 0.6 per cent in the previous quarter when warm weather and the World Cup contributed to a boost in economic activity.

Annual GDP for 2018 increased by 1.4 per cent; the weakest since 2009.

Mr Hammond said: “It’s a solid performance from the economy when you look at what’s happening globally and in other competitor countries.

“But, of course, there is no doubt that our economy is being overshadowed by the uncertainty created by the Brexit process. The sooner we can resolve that the better and the quicker we can get back to more robust growth in the future,” he added.

However, the Chancellor’s Labour Shadow, John McDonnell, said the evidence was mounting that a “combination of the Government’s shambolic handling of Brexit and nine years of austerity” was causing real damage to the economy.

“Business investment has been falling for months now as uncertainty and the fear of no-deal cause immediate damage to confidence. Six consecutive months of decline for the manufacturing sector hasn’t happened since 2009,” he pointed out.

Mr McDonnell added: “The Government must act now to take no-deal off the table and Philip Hammond must use his Spring Statement to end the disastrous austerity policy which has done so much to damage the economy.”

Sir Vince Cable for the Liberal Democrats claimed Britain was “now fairly close to recession”.

The party leader said: “These figures are in fact flattering. The reality is much worse because whatever growth there is has been caused merely by businesses accumulating stocks in fear of Brexit.”

But Liam Fox, the International Trade Secretary, on a visit to Switzerland for the signing of a trade agreement, suggested it was wrong to blame Brexit for the economic slowdown, which was affecting several parts of the globe.

He told reporters: "Clearly, there are those who believe Brexit is the only economic factor applying to the UK economy. You’ll find that the predicted slowdown in a number of European economies is not disconnected from the slowdown, for example, in China.

“The idea that Brexit is the only factor affecting the global economy is just to miss the point,” insisted the Scot.

Meanwhile, senior Tories hit out at Labour’s Brexit plan, reflecting concern among Conservative Brexiteers that the PM, following an exchange of letters with Jeremy Corbyn, could concede too much ground to Labour in a bid to win cross-party backing for a deal with Brussels.

Dr Fox branded Labour's plan - to be in a customs union with the EU but still have a say on EU trade policy - a “dangerous delusion” while his fellow Brexiteer, Boris Johnson, accused the Labour leader of trying to trap the Government in a "toxic" Brexit.

Elsewhere, Downing St denied the PM was “running down the clock” to the March 29 exit day.

MPs will take part in another indicative Brexit vote on Thursday when Labour will try to force the Government to hold a second binding “meaningful vote” on Mrs May’s plan by the end of this month.

Speaking in Dublin, ahead of a series of meetings with unions, business and political leaders, Sir Keir Starmer, the Shadow Brexit Secretary, said: “I am concerned that with 46 days to go the PM is simply running down the clock, mindful that the next EU Summit is March 21 and if she's is trying to run the clock down, Parliament has to step in with a hard stop to say we are not going to accept that."

But the PM's spokesman insisted he did "not accept the premise" that Mrs May was running down the clock, insisting she had been "working hard, having discussions both at home and abroad in order to provide the assurances MPs need to be able to support her deal".

In other developments:

*Michel Barnier said “something has to give” on the British side of the negotiations if the Brexit impasse was to be broken;

*the EU’s chief negotiator was due to have a working dinner in Brussels with Stephen Barclay after the Brexit Secretary met members of the Conservatives’ Alternative Arrangements Working Group, which is behind the Malthouse Compromise;

*the Right to Vote group, consisting of anti-Brexit Conservative MPs and peers, has written to the PM saying Britain is “not ready to leave” the EU on March 29 and asked for a meeting to discuss their call for a delay;

*on a visit to Birmingham, Michael D Higgins, Ireland’s President, said building upon "the deep friendships which have grown between Britain and Ireland" would be more important than ever in the wake of Brexit;

*the Government has agreed to allow some 15,000 citizens of Norway, Iceland and Liechtenstein already living in the UK to remain after Brexit even if the country leaves the EU without a deal;

*Mr Johnson said the focus now for the Government should be to get out of the backstop and make sure the UK was not “locked in that prison of customs union,” which would require a time-limit and

*Rory Stewart, the UK Government’s Prisons Minister, insisted there was “not actually as much dividing us from Labour as some people suggest," noting how the Government’s proposed customs partnership would give Mr Corbyn what he wanted on tariffs but would also allow the UK to conduct its own trade deals.