UK (Parliament Politics Magazine) – UK economy expands only 0.1% in Q3 as Jaguar Land Rover cyber-attack hits production, with sluggish services and weak investment dragging growth.
As reported by The Guardian, UK GDP grew just 0.1% in July–September amid the impact of Jaguar Land Rover’s cyber-attack.
What did ONS figures reveal about UK GDP in Q3?
The Office for National Statistics data show UK economic output fell 0.1% in September, with car manufacturing hitting a 73-year low after the JLR cyber-attack.
According to the ONS, the JLR cyber-attack in September significantly impacted manufacturing output.
It said,
“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.”
Liz McKeown, ONS director of economic statistics, said,
“Across the quarter as a whole manufacturing drove the weakness in production. There was a particularly marked fall in car production in September, reflecting the impact of a cyber incident, as well as a decline in the often-erratic pharmaceutical industry.”
The slowdown began in August, with GDP growth revised to zero before the cyber-attack hit manufacturing.
The economy grew just 0.1% in Q3, down from 0.3% in Q2 and below the expected 0.2%, with September underperforming forecasts.
Economists say sluggish growth raises the chances of a Bank of England rate cut after four of nine MPC members backed a reduction.
The latest GDP data came after the ONS release, which showed the unemployment rate had risen to 5%, the highest in four years.
The ONS reported that, alongside a decline in production output due to JLR’s halted operations, growth in services eased to 0.2% in Q3, down from 0.4% in the previous three months.
According to the report, weaker growth was largely driven by a decline in
“professional, scientific and technical activities.”
ONS data revealed construction grew by only 0.1%, raising concerns for the government’s housebuilding plans, as ‘new work’ fell 0.2% compared with maintenance projects.
Business investment dropped 0.3% this quarter, rising just 0.7% from a year ago, a setback for Labour’s economic plans focused on boosting private sector growth.
How did Rachel Reeves respond to the latest GDP figures?
Commenting on the GDP figures, Chancellor Rachel Reeves said,
“We had the fastest-growing economy in the G7 in the first half of the year, but there’s more to do to build an economy that works for working people.”
She added,
“At my budget later this month, I will take the fair decisions to build a strong economy that helps us to continue to cut waiting lists, cut the national debt and cut the cost of living.”
How did Mel Stride respond to the latest UK economic growth data?
In response to the recent GDP figures showing slower UK growth, the Conservatives claimed Prime Minister Sir Keir Starmer and Chancellor Rachel Reeves are “in office but not in power.”
Shadow chancellor Sir Mel Stride stated,
“Today’s ONS figures show the economy shrank in the latest month, under a prime minister and chancellor who are in office but not in power.”
He said,
“Months after the prime minister stripped the chancellor of responsibility for the Budget, Keir Starmer has now lost control of his own Downing Street operation – with his team openly at war with his Cabinet.”
Mr Stride added,
“If the prime minister does not have the backbone to control his team, he has no hope of reducing spending. Only the Conservatives have a leader with a backbone and a plan to deliver £47 billion of savings – allowing us to cut tax and cut the deficit under our golden economic rule.”
How did Daisy Cooper respond to the latest GDP figures?
Liberal Democrat Treasury spokesperson Daisy Cooper MP stated,
“This is a damning indictment of Labour’s disastrous decisions.”
She added,
“From the jobs tax to business rates bills, the economy is barely spluttering along. The chancellor must take up our plans for an emergency package to save our high streets, put money back in the pockets of families and finally fix our broken relation with Europe to bring in billions for our public services.”
How did Paul Nowak respond to current economic challenges?
TUC general secretary Paul Nowak stated,
“Bringing our economy back on track after 14 years of Tory chaos was never going to be straightforward. Cyber attacks on major manufacturers and a volatile international context are not making this job any easier.”
He said,
“While previous retail sales figures were encouraging, consumer spending is still subdued – the government should now stay the course and use the Budget as an opportunity to keep supporting living standards.”
Mr Nowak added,
“More money in people’s pockets will mean more spending on our high streets, more jobs, and stronger growth. But the Treasury are not the only actor at play here. The Bank of England needs to cut interest rates as a matter or priority – and end long-standing restraint on families’ and businesses’ finances.”
How did industry experts respond to the UK’s economic growth?
Ashwin Kumar, director of research and policy at IPPR, stated,
“The UK continues to show unspectacular economic growth. Today’s figures emphasise the need for the government to continue with its policies to boost public and private investment, reform the planning system, and improve our trading relationship with the EU.”
He said,
“The government needs to consider how it can provide more certainty to businesses looking to build and look at how it can reform taxes to promote growth. This quarter’s GDP figures were also affected by a major cyber attack on one car manufacturer, emphasising the real effects of cyber crime, and the economic value of measures to protect the UK from such activity.”
Lindsay James, investment strategist at Quilter, warned that the economy is losing momentum ahead of the Autumn Budget.
She said,
“Industrial output was back in contraction in September, partly due to the Jaguar Land Rover cyber-attack issues. This paints a picture of an economy that started 2025 strongly but is now badly losing steam just as the Chancellor prepares for a pivotal Autumn Budget. Her next move will be critical if she is to recover Labour’s economic growth mission and prevent any whispers of a recession looming.”
Ms James added,
“The nature of this Budget remains crucial for what comes next. Encouragingly, inflation appears to have peaked. However, uncertainty over potential tax rises and persistent rumours of employers being targeted yet again, such as through an ill thought-out attack on DC pension contributions via salary sacrifice, risks snuffling out fragile business confidence and pushing unemployment, already now at five per cent markedly higher.”
James Smith, research director at the Resolution Foundation thinktank, stated,
“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.”
What is GDP, and how is it calculated in the UK?
Gross Domestic Product (GDP) is the total market value of all final goods and services produced within a country during a specific period, usually a year.
In Britain, the Office for National Statistics gathers data from thousands of firms across the UK, which can be calculated in three different ways:
- The total value of all goods and services produced.
- The combined income of everyone in the country.
- The total spending by all people in the country.
The recent data shows that the UK’s GDP grew by 0.1% in the third quarter of 2025, following a 0.3% growth in the second quarter of 2025.