UK’s sluggish Q3 economy disappoints ahead of Nov 26 Budget to kickstart growth
Growth was held back by a cyberattack on major car maker Jaguar Land Rover; September production of cars fell by nearly 30%
[MANCHESTER] Britain’s economy barely expanded in the third quarter.
It was held back by September’s cyberattack on Jaguar Land Rover (JLR), based on data on Thursday (Nov 13), which underlined the backdrop of slow growth, as finance minister Rachel Reeves readies her Budget.
The economy grew 0.1 per cent in the third quarter of 2025, the Office for National Statistics (ONS) said, slowing from a growth of 0.3 per cent in the second quarter.
Economists, polled by Reuters and the Bank of England, had forecast a 0.2 per cent growth in gross domestic product (GDP) for the July-September period.
In September alone, the economy contracted by 0.1 per cent, against expectations for a flat reading.
Thursday’s data is unlikely to sway deliberations around Reeves’ Nov 26 Budget, with the economy still growing tepidly despite the government’s intention to “kickstart” it.
‘Sluggish growth trajectory’
“The UK’s unrelentingly sluggish growth trajectory is a headache for the Chancellor (finance minister), as it will inevitably mean a substantial fiscal shortfall at the Budget, making major tax hikes look unavoidable,” said Suren Thiru, economics director at the Institute of Chartered Accountants in England and Wales.
The ONS reported a 28.6 per cent collapse in the production of motor vehicles in September, the biggest such drop since April 2020, at the onset of the Covid-19 pandemic.
Overall, motor vehicles subtracted 0.17 percentage points from the GDP in September alone, and 0.06 percentage points for the third quarter as a whole.
The ONS cited a report from the Society of Motor Manufacturers and Traders that described how “a cyber incident paused production at a major manufacturer”.
JLR, owned by India’s Tata Motors, has three factories in Britain, which together produce about 1,000 cars per day.
The hack cost the British economy an estimated £1.9 billion (S$3.2 billion) and affected over 5,000 organisations, an independent cybersecurity body said in a report published in October.
A fall in commercial vehicle production in September added to the sector’s woes.
The Bank of England expects to see the economy rebound in the fourth quarter with a 0.3 per cent expansion.
In response to the figures, Reeves highlighted the fact that Britain had the fastest-growing economy among Group of Seven nations over the first half of 2025, but said there was more to do. REUTERS
Decoding Asia newsletter: your guide to navigating Asia in a new global order. Sign up here to get Decoding Asia newsletter. Delivered to your inbox. Free.
Share with us your feedback on BT's products and services
