UK GDP Growth Slows to 0.1% as Jaguar Land Rover Cyber‑Attack Hits Car Production

UK GDP Growth Slows to 0.1% as Jaguar Land Rover Cyber‑Attack Hits Car Production

Official figures from the Office for National Statistics (ONS) show the UK economy expanded by just 0.1% in the July–September quarter, weaker than the 0.2% many economists had expected. The slowdown reflects a sharp drop in manufacturing activity, driven largely by a cyber-attack on Jaguar Land Rover (JLR) that severely disrupted car output.

The ONS reported that the economy contracted by 0.1% in September alone. Overall production output fell 2% that month, with car manufacturing plunging 28.6% following the JLR incident. The cyber-attack began on 31 August and forced one of the UK’s largest automakers to halt production for around five weeks, cutting a significant slice out of factory output.

Services were the main positive contributor to quarterly growth, with business rental and leasing, live events and retail performing well. However, those gains were partly offset by weakness in other service sub-sectors — including research and development and personal services such as hair and beauty salons — and by softer construction activity compared with the previous quarter.

"Services were the main contributor to growth in the latest quarter, with business rental and leasing, live events and retail performing well, partially offset by falls in R&D and hair and beauty salons," said Liz McKeown, director of economic statistics at the ONS.

The 0.1% quarterly rise follows a 0.3% increase in the previous quarter and a 0.7% expansion in the first three months of the year. These are the final GDP figures released before Chancellor Rachel Reeves prepares her Budget later this month, when she is widely expected to announce measures — including tax increases — aimed at meeting her borrowing targets.

"The UK 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," Reeves said. "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."

Market watchers and economists said the softer data increase the chances the Bank of England may consider cutting interest rates at its next meeting. Ruth Gregory, deputy chief UK economist at Capital Economics, said the economy was "struggling to gain decent momentum" even before accounting for the JLR disruption and warned that planned tax rises could further trim GDP growth.

"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," said Ruth Gregory.

Some political reaction was pointed. Shadow Chancellor Mel Stride said the government appeared "in office but not in power," claiming Sir Keir Starmer had limited the chancellor's control over the Budget. Suren Thiru, economics director at the Institute of Chartered Accountants in England and Wales, suggested the data could be enough "to push a majority of rate-setters to authorise another policy loosening."

In short, a sharp, temporary shock to car production has materially weakened third-quarter growth, leaving policymakers to weigh fiscal and monetary responses ahead of the Chancellor’s Budget and upcoming Bank of England decisions.