UK economy rebounded in November as Jaguar cyberattack faded
The GDP rises 0.3% in November, beating all 29 forecasts monitored by Bloomberg
[LONDON] A recovery in industrial production following the Jaguar Land Rover (JLR) cyberattack drove UK growth to a five-month high, in the run-up to Chancellor of the Exchequer Rachel Reeves’ Budget.
The gross domestic product rose 0.3 per cent in November, rebounding from a 0.1 per cent fall in October, the Office for National Statistics (ONS) said on Thursday (Jan 15). It was better than the 0.1 per cent growth predicted by economists, and beat all 29 forecasts monitored by Bloomberg.
The ONS said that the number was helped by a rebound at JLR, the car giant hit by a cyberattack earlier in the autumn. Half of the increase in GDP was due to industrial production, with car manufacturing soaring 26 per cent month on month.
The cyberattack at JLR closed production at all its factories for almost six weeks, an unprecedented shutdown for the global car industry. The impact was so severe that the government stepped in with a £1.5 billion (S$2.6 billion) emergency loan guarantee, to help suppliers reliant on Britain’s biggest carmaker.
The pound briefly erased a small drop against the dollar after the data, before easing back to trade around US$1.343. Traders trimmed wagers on the extent of the Bank of England (BOE) interest rate cuts, though two quarter-point cuts by year-end are still seen as very likely.
The figures still leave uncertainty about the underlying strength of the economy, with the JLR factor likely to fade and the effects of Reeves’ Budget – in which she lifted taxes by £26 billion – still to be seen.
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“November’s uptick means it’s inevitable that the UK economy grew modestly across the final quarter of 2025, with easing uncertainty post-Budget likely to have supported growth in December,” said Suren Thiru, economics director at the Institute of Chartered Accountants in England and Wales.
Still, Ruth Gregory, deputy chief UK economist at Capital Economics, said: “November’s strength is more likely to be a rebound rather than a sign that the economy is fundamentally stronger than we thought.”
It was only the second month that the British economy expanded in the second half of the year. The ONS said the services sector expanded 0.3 per cent, recouping all the loss from the previous month, as half of all subsectors posted gains. Manufacturing grew 2.1 per cent.
On a three-month basis, the UK’s overall output was narrowly up 0.1 per cent.
A more resilient economy is likely to feed into the thinking of the BOE, as it decides how much further to go on interest rate cuts.
While there have been signs of the labour market downturn intensifying, the economy looks set to perform better than the zero growth the central bank pencilled in for the fourth quarter.
It would now require around a 0.4 per cent plunge in GDP in December to get a flat reading.
“On the margins, this should raise the bar for a February rate cut,” said Sanjay Raja, chief UK economist at Deutsche Bank. “With the economy now on a firmer footing than expected, the impetus to accelerate rate cuts is likely lower.” BLOOMBERG
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