UK Economy Inches Forward at 0.1% in Q3, Cyber-Attack on Automaker Blueprint for Weakness
Growth stalls ahead of Autumn Budget as production fall at Jaguar Land Rover drags GDP
The United Kingdom’s economy managed just a 0.1 per cent expansion in the third quarter of 2025, according to a preliminary estimate, falling short of market expectations and highlighting the serious drag from a cyber-attack on its largest car manufacturer.
The growth rate marked a marked slowdown from the 0.3 per cent increase in the prior quarter and came in below the 0.2 per cent rise forecast by economists.
The disruption stemmed largely from a cyber-incursion that forced Jaguar Land Rover to suspend operations from late August through September, ripple-effects that were evident in a 28.6 per cent drop in car and trailer manufacturing in September — the biggest fall since April 2020 — and an overall 2 per cent decline in production for the month.
That collapse in industrial output weighed heavily on the economy during the quarter.
Services, which account for the majority of the UK economy, expanded by just 0.2 per cent, while construction grew a mere 0.1 per cent.
Business investment fell 0.3 per cent and unemployment ticked up to five per cent, the highest level in four years.
The weak performance comes less than two weeks before the government’s Autumn Budget, placing added pressure on Chancellor Rachel Reeves to balance growth aspirations with fiscal consolidation.
Reeves publicly noted the cyber-attack’s impact and acknowledged that difficult decisions would follow, including likely tax rises to help reduce the debt burden and support public services.
The fragility of growth also heats up discussions among policymakers at the Bank of England, who are now seen as more likely to consider a rate cut in December, given the data.
However, the confluence of low growth, elevated inflation and muted investment suggests any recovery will require coherent fiscal and monetary policy, coupled with stronger private-sector momentum.
With the economy riding the fallout of a major supply-chain shock and suffering weakness across sectors, the budget on 26 November now stands as a pivotal moment: how the government responds could shape the growth trajectory for the rest of the year and beyond.
The data underscore that one operational failure in a key industry may have national-scale implications for growth and resilience.
The growth rate marked a marked slowdown from the 0.3 per cent increase in the prior quarter and came in below the 0.2 per cent rise forecast by economists.
The disruption stemmed largely from a cyber-incursion that forced Jaguar Land Rover to suspend operations from late August through September, ripple-effects that were evident in a 28.6 per cent drop in car and trailer manufacturing in September — the biggest fall since April 2020 — and an overall 2 per cent decline in production for the month.
That collapse in industrial output weighed heavily on the economy during the quarter.
Services, which account for the majority of the UK economy, expanded by just 0.2 per cent, while construction grew a mere 0.1 per cent.
Business investment fell 0.3 per cent and unemployment ticked up to five per cent, the highest level in four years.
The weak performance comes less than two weeks before the government’s Autumn Budget, placing added pressure on Chancellor Rachel Reeves to balance growth aspirations with fiscal consolidation.
Reeves publicly noted the cyber-attack’s impact and acknowledged that difficult decisions would follow, including likely tax rises to help reduce the debt burden and support public services.
The fragility of growth also heats up discussions among policymakers at the Bank of England, who are now seen as more likely to consider a rate cut in December, given the data.
However, the confluence of low growth, elevated inflation and muted investment suggests any recovery will require coherent fiscal and monetary policy, coupled with stronger private-sector momentum.
With the economy riding the fallout of a major supply-chain shock and suffering weakness across sectors, the budget on 26 November now stands as a pivotal moment: how the government responds could shape the growth trajectory for the rest of the year and beyond.
The data underscore that one operational failure in a key industry may have national-scale implications for growth and resilience.
