The UK economy teetered on the edge of stagnation in the third quarter of 2025, hampered by a major cyberattack in September that disrupted production at Jaguar Land Rover (JLR). The fresh data showed on Thursday underscore the sluggish growth environment as Chancellor and Finance Minister, Rachel Reeves, prepares her upcoming budget announcement.
According to the Office for National Statistics (ONS), UK GDP edged up by just 0.1% in the third quarter, marking a slowdown from the preceding quarter’s 0.3% expansion. This result also fell short of consensus estimates from Reuters’ economists and the Bank of England, both had anticipated a 0.2% increase for the period.
The downturn was particularly pronounced in September, when the economy shrank by 0.1%, missing projections for flat output. However, Thursday’s figures are unlikely to shift the policy outlook ahead of Reeves’ November 26 budget, as Britain’s growth continues to languish, despite governmental aims to revive activity.
The ONS highlighted a sharp 28.6% decline in motor vehicle output in September—the steepest contraction since April 2020, at the onset of the COVID-19 pandemic. This slump in automotive production, primarily attributed to a cyber incident at a major manufacturer as noted by the SMMT motor industry body, shaved 0.17 percentage points off monthly GDP and 0.06 percentage points from the quarterly figure.
Jaguar Land Rover (JLR), now owned by India’s Tata Motors, operates three UK plants collectively producing 1,000 vehicles daily. According to an independent cybersecurity organization, the cyberattack cost the British economy roughly $2.55 billion and had repercussions for over 5,000 organizations.
Looking ahead, the Bank of England projects a recovery in the fourth quarter, forecasting GDP growth of 0.3%. Meanwhile, Reeves, responding to the ONS data, emphasized that Britain registered the fastest economic growth among the Group of Seven nations in the first half of 2025, though she acknowledged the work ahead to sustain momentum.
