UK economic growth slows to 0.1% amid hit from JLR cyber-attack

Growth across the UK economy slowed to a near standstill in the third quarter, as weakness in manufacturing and faltering consumer demand dragged on output ahead of the autumn budget.

Gross domestic product (GDP) expanded by just 0.1% between July and September, down from 0.3% in the previous quarter, according to the Office for National Statistics. Adjusted for population, GDP per head showed no growth at all.

The services sector grew by 0.2%, construction edged up by 0.1%, while the production sector contracted by 0.5%. Monthly figures showed GDP falling by 0.1% in September, following flat output in August, revised down from an initial estimate of 0.1% growth, and a 0.1% decline in July.

The cyber-attack on Jaguar Land Rover in September was among the factors that hammered activity in the manufacturing sector.

The breach disrupted operations across roughly 5,000 organisations, including JLR’s network of affiliated dealerships, repair centres and hundreds of small parts and materials suppliers.

Production at the carmaker was halted on September 1 and remained largely suspended for five weeks, with factories only gradually returning to full capacity in October. The disruption was severe enough to trim 0.17 percentage points from UK economic growth in September.

ONS director of economic statistics Liz McKeown 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 0.1% growth recorded in July-September appears to be the slowest quarterly growth since the short recession in the second half of 2023.

The data comes as chancellor Rachel Reeves prepares to raise taxes in her upcoming budget to help plug a gap in the public finances of as much as £30bn. The planned fiscal tightening threatens to weigh further on an economy already showing signs of strain, with unemployment now at 5% and hiring slowing across key sectors.

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.

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“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.”

Read more: Rachel Reeves lays the ground for raising taxes in autumn budget

The Bank of England had forecast 0.2% growth for the quarter, as had analysts surveyed by Reuters, citing weaker exports to the US and the impact of the cyber attack.

Samuel Edwards, head of dealing at global financial services firm Ebury, said: “September’s unexpected GDP drop will undoubtedly be a kick in the teeth for the chancellor, in what is one of the last major pieces of economic data before her anxiously awaited autumn budget."

“Nervousness around the budget has likely weighed on key economic drivers, while disappointing export performance to the US and a stagnating labour market have kept GDP in a chokehold.”

“With the economy losing steam, the ‘all but confirmed’ budget tax rises look set to further unsettle businesses and households in the run-up to Christmas – dimming hopes of any material recovery.”

Read more: UK property market cools amid autumn budget fears

Looking over the longer term, the ONS says GDP is estimated to have grown by 1.3% in the three months to September 2025, compared with the same three months a year ago.

The UK economy is clearly struggling to maintain momentum, warns Ruth Gregory, deputy chief UK economist at Capital Economics.

She said: "Much of the 0.1% m/m fall in September and muted 0.1% q/q rise in GDP in Q3 was due to the hit to manufacturing activity caused by the Jaguar Land Rover cyber-attack, which will be reversed in Q4."

"Even so, the big picture is that the economy is struggling to gain decent momentum in the face of higher taxes and soft overseas activity. And with tax rises in the upcoming budget likely to trim GDP by around 0.2% in 2026, there is little reason to think that GDP growth will accelerate much from here."

Read more:

UK investors pull £3.6bn from stock funds amid budget and soaring share price fears UK unemployment hits four-year high ahead of autumn budget How the self-employed can soften the blow from a potential 2p tax rise

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