UK economy inches forward with just 0.1% growth in Q3 as major auto cyber-attack drags output

13 November 2025

Credits: Sova Vitalij

In the three months from July to September 2025 the UK economy grew by a mere 0.1 percent, down from 0.3 percent in the previous quarter a markedly weak performance that casts a long shadow over the government’s hopes for a robust recovery.

The month of September alone saw the economy contract by 0.1 percent. The manufacturing sector bore the brunt of the setback, driven by a 28.6 percent collapse in motor vehicle production that month the sharpest monthly fall in over seven decades after a cyber-attack on Jaguar Land Rover (JLR) forced a shutdown of several plants.

Industry output overall fell by 2 percent in September and this single hit subtracted roughly 0.17 percentage points from GDP for that month. Services and construction both eked out slight growth of 0.2 percent, but the underperformance in production proved decisive.

Exports to the United States also disappointed: UK goods exports to the US were down 11.4 percent year-on-year in September, the lowest level since January 2022, largely reflecting the impact of tariffs and weakening demand for chemicals, machinery and transport equipment.

The timing of the figures is especially challenging for the government as Chancellor Rachel Reeves prepares for the looming Autumn Budget on 26 November. The slow growth performance intensifies pressure to deliver a credible growth strategy, even as fiscal headwinds mount.

Market reaction has been swift: investors stepped up expectations for a rate cut by the Bank of England, with odds for a move in December now markedly higher. The pound strengthened modestly against the dollar amid shifting sentiment.

Despite the weak quarterly reading the UK still remains, according to the Resolution Foundation, the second-fastest growing economy in the G7 year-to-date a reflection of the modest baseline as much as underlying strength. Still, the pace of growth is clearly losing steam.

Looking ahead the key questions are: how much of the shortfall was truly one-off (for example the JLR disruption) and how much reflects a deeper slowdown in investment, productivity and external demand. Analysts at Capital Economics warn that even absent the auto-shock the economy is struggling to maintain momentum given tax increases, weak business investment and global trade headwinds.

From a business-investment viewpoint the muted growth raises red flags for corporate confidence, capital spending and the labour market. With unemployment now at 5 percent the highest since 2021 firms may become more cautious in hiring or expansion.

Consumers are also likely to feel the squeeze. Flat real growth, rising taxes and cost-of-living pressures could combine to dampen household spending in coming months, putting further strain on services a sector that has been carrying much of the growth burden. The resulting consumer caution could feed back into weaker investment and slower hire-ups.

For policy-makers the implications are significant. A budget that leans heavily on tax rises or spending cuts risks choking off any nascent recovery. The Chancellor has already acknowledged that the economy “has more to do” work to restore robust growth.

In short the UK enters the final weeks of the year with a growth story sounding flat rather than accelerating. While the headline figure of 0.1 percent growth may appear to be a technicality, the reality is that the economy is struggling to find its footing at a critical time. With the Budget looming and global uncertainty growing, the next moves by government and the central bank may define whether this phase becomes a shallow hiccup or the beginning of a deeper stagnation.