By bizn_fun 
The UK economy expanded by just 0.1% in the quarter from July to September as the crippling cyber-attack on Jaguar Land Rover hit manufacturing.
The latest official figures, issued as Rachel Reeves prepares for a crunch budget on 26 November, show gross domestic product fell by 0.1% in September as car production was dragged down to a 73-year low by the fallout from the hack.
The Office for National Statistics (ONS) highlighted the influence of the cyber-attack, saying: “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.”
The GDP slowdown began earlier, however, with growth in August – before the cyber-attack hit – revised down to zero from an initial estimate of 0.1%.
The third-quarter growth reading of 0.1% marked a significant slowdown from the 0.3% expansion seen from April to June, and was weaker than the 0.2% expected by markets. September also undershot a forecast of flatlining growth.
The gloomier-than-expected figures increased expectations of an interest rate cut from the Bank of England in December, after last week’s narrow vote to hold the rate at 4% when four out of nine members of the monetary policy committee backed a reduction.
The GDP data followed an ONS release on Tuesdaythat showed the unemployment rate had risen to 5%, the highest for four years.
Martin Beck, the chief economist at the consultancy WPI Strategy, said: “Combined with a softening labour market, the figures add to evidence that economic and political uncertainty is weighing on activity and leave a Bank of England rate cut in December even more likely.”
The chancellor is widely expected to raise taxes in her second budget later this month, to offset a forecast downgrade from the independent Office for Budget Responsibility.
Reeves said in a recent speech: “Each of us must do our bit for the security of our country and the brightness of its future.”
The weak GDP reading underlined the risks that sharply higher taxes could slam the brakes on the economy.
James Smith, research director at the Resolution Foundation thinktank, said: “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.”
Alongside the decline in manufacturing output as JLR’s production lines fell silent, the ONS said there was also a slowdown in the growth of services output in the third quarter, to 0.2%, from 0.4% in the previous three months.
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It pointed to a decline in “professional, scientific and technical activities” as the driver of this weaker growth.
Construction output expanded by just 0.1%, in a worrying sign for a government that has pledged to ramp up housebuilding significantly. Within that, the ONS said “new work,” rather than repairs, was down by 0.2%.
Labour will not be pleased either with news that business investment declined, by 0.3% on the quarter, to a level just 0.7% higher than a year ago. Boosting private sector investment has been a key aim of the government’s economic strategy.
Responding to the GDP figures, 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.
“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.”
The shadow chancellor, Mel Stride, said the data was evidence of “a prime minister and chancellor who are in office but not in power”. Referring to Downing Street briefing about a possible leadership challenge, Stride added:“If the prime minister does not have the backbone to control his team, he has no hope of reducing spending”.