What's going on?

Data out on Tuesday showed the UK economy narrowly outpaced a contraction in the final quarter of 2019, but it�s not exactly going anywhere fast.

What does this mean?

The UK economy flatlined in the last three months of 2019, as Brexit- and election-fueled uncertainty deterred consumers from spending and businesses from investing. And while there was growth in the services sector � which accounts for 80% of the economy � it was more than offset by the decline in manufacturing. The British motor industry was hit particularly hard, with trade tensions disrupting supply chains around the world.

There might be a glimmer of hope, mind you: the economy grew by a better-than-expected 0.3% in December � the same month the Conservative Party gained a significant majority in the general election. That stat, then, suggests some of the long-standing uncertainty could be starting to lift. Just don�t get too excited: the new government still needs to strike a trade deal with the European Union before the end of the year.

Why should I care?

For markets: Remember the good old days?
The UK economy grew 1.4% in 2019 � slightly better than 2018�s 1.3% growth, but well below the 2% rate of the five years before. During its last meeting, Britain�s central bank warned it would have to cut interest rates if economic growth doesn�t pick up. That could boost British stock and bond prices, sure, but it would also hurt the country�s savers and banks.

The bigger picture: High-speed fail.
An increase in government spending helped give the UK economy a boost in 2019, and that tailwind could continue into 2020 and beyond. The government just approved a $137 billion high-speed rail project, for example � the biggest infrastructure project in Europe. It might be hoping its rail network can catch up to its European neighbors, but that could take a while: the project isn�t scheduled to be fully completed until late 2040�