The United Kingdom’s economy grew by only 0.1% between July and September, weighed down by a major cyber-attack on Jaguar Land Rover that disrupted manufacturing output. Official data from the Office for National Statistics (ONS) revealed that gross domestic product contracted by 0.1% in September alone, as vehicle production plummeted to its weakest level in 73 years due to the incident. n nThe ONS attributed the monthly decline primarily to a 28.6% drop in the production of motor vehicles, trailers, and semi-trailers, which contributed to an overall 2.0% fall in industrial output. The impact was so significant that even August’s growth, which occurred before the cyber incident, was revised down from 0.1% to zero, indicating broader underlying weakness. n nThis resulted in a third-quarter expansion of just 0.1%, a notable deceleration from the 0.3% growth recorded in the previous quarter and below the 0.2% increase anticipated by financial markets. September’s performance also missed expectations, which had forecast no change in economic activity. n nThe subdued figures have strengthened speculation that the Bank of England may lower interest rates in December. Last week, a closely divided monetary policy committee voted 5-4 to maintain the benchmark rate at 4%, with four members already favoring a cut. Weaker economic momentum, combined with rising unemployment reaching 5%—a four-year high—has increased pressure for monetary easing. n nMartin Beck, chief economist at WPI Strategy, noted that the combination of slowing output and a softening labor market suggests ongoing economic headwinds, making a rate reduction more probable. n nChancellor Rachel Reeves is preparing her second fiscal statement on 26 November, amid expectations she will raise taxes to address a projected shortfall in public finances following a forthcoming assessment by the Office for Budget Responsibility. However, the fragile state of the economy raises concerns that higher taxes could further dampen growth. n nJames Smith, research director at the Resolution Foundation, emphasized the difficulty ahead, stating that the upcoming budget must support economic recovery rather than hinder it, despite the need for fiscal tightening. n nBeyond manufacturing, other sectors also showed signs of strain. Services output growth slowed to 0.2% from 0.4%, driven by a decline in professional, scientific, and technical services. Construction rose by just 0.1%, with new projects falling 0.2%, a worrying signal for a government committed to boosting housing supply. Business investment dropped 0.3% in the quarter and remains only 0.7% above year-ago levels, undermining efforts to stimulate private-sector activity. n nA spokesperson for Downing Street acknowledged the figures were “disappointing” but stressed the exceptional nature of the cyber-attack on JLR as the main cause of the September downturn. They highlighted that the UK had the fastest-growing G7 economy in the first half of the year and reaffirmed the government’s commitment to building a stronger economic foundation. n nWhen questioned about accountability for the slowdown, the spokesperson rejected any suggestion of ministerial responsibility, maintaining that external shocks were largely to blame.
— news from The Guardian
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UK economy grew by just 0.1% in third quarter after hit from JLR cyber-attack
The UK economy expanded by just 0.1% in the quarter from July to September as the crippling cyber-attack on Jaguar Land Rover hit manufacturing. n nThe latest official figures, issued as Rachel Reeves prepares for a crunch budget on 26 November, show gross domestic product fell by 0.1% in September as car production was dragged to a 73-year low by the fallout from the hack. n nThe Office for National Statistics (ONS) highlighted the influence of the cyber-attack, saying: “Production fell by 2.0% in September 2025 mainly because of a 28.6% fall in the manufacture of motor vehicles, trailers and semi-trailers.” n nThe GDP slowdown began earlier, however, with growth in August – before the cyber-attack hit – revised down to zero from an initial estimate of 0.1%. n nThe third-quarter growth reading of 0.1% marked a significant slowdown from the 0.3% expansion seen from April to June, and was weaker than the 0.2% expected by markets. September also undershot a forecast of flatlining growth. n nThe gloomier-than-expected figures increased expectations of an interest rate cut from the Bank of England in December, after last week’s narrow vote to hold the rate at 4% when four out of nine members of the monetary policy committee backed a reduction. n nThe GDP data followed an ONS release on Tuesdaythat showed the unemployment rate had risen to 5%, the highest for four years. n nMartin Beck, the chief economist at the consultancy WPI Strategy, said: “Combined with a softening labour market, the figures add to evidence that economic and political uncertainty is weighing on activity and leave a Bank of England rate cut in December even more likely.” n nThe chancellor is widely expected to raise taxes in her second budget later this month, to offset a forecast downgrade from the independent Office for Budget Responsibility. n nReeves said in a recent speech: “Each of us must do our bit for the security of our country and the brightness of its future.” n nThe weak GDP reading underlined the risks that sharply higher taxes could slam the brakes on the economy. n nJames Smith, the research director at the Resolution Foundation thinktank, said: “This latest slowdown shows the scale of the challenge facing the government as it seeks to kickstart growth. The next challenge will be to ensure that the upcoming budget supports rather than hinders growth – no mean feat given the scale of fiscal consolidation that is expected.” n nAlongside the decline in manufacturing output as JLR’s production lines fell silent, the ONS said there had also been a slowdown in the growth of services output in the third quarter, to 0.2%, from 0.4% in the previous three months. n nIt pointed to a decline in “professional, scientific and technical activities” as the driver of this weaker growth. n nConstruction output expanded by just 0.1%, in a worrying sign for a government that has pledged to increase housebuilding significantly. Within that, the ONS said “new work”, rather than repairs, was down by 0.2%. n nLabour will not be pleased either with news that business investment declined, by 0.3% on the quarter, to a level just 0.7% higher than a year ago. Boosting private sector investment has been a key aim of the government’s economic strategy. n nA No 10 spokesperson described the GDP figures as “disappointing”. n n“It’s obviously important to recognise the significance of the cyber-attack” on Jaguar Land Rover, which is “clearly the primary driver behind the weaker September figures”, they said. n n“But we are determined to deliver that growth. We had the fastest-growing economy in G7 in the first half of this year, but there is clearly more to do to build an economy that works for working people.” n nAsked whether the chancellor should take responsibility for the slowing growth, the spokesperson said: “I don’t accept that.”