The UK's economic growth slowed significantly in the run-up to the autumn Budget, according to official figures released today.
The Office for National Statistics (ONS) reported that gross domestic product (GDP) grew by just 0.1% between July and September, a sharp decline from the 0.3% increase seen in the previous quarter.
Manufacturing Hit by Cyber Incident
The slowdown was partly driven by a 0.1% contraction in the economy during September. This decline was heavily linked to a major cyber attack on Jaguar Land Rover (JLR), which forced a shutdown of its manufacturing operations.
Official data showed that overall production output fell by 2% for the month. The most dramatic drop was seen in the car and trailer manufacturing sector, which plunged by 28.6%.
This represents the sharpest fall in car production since April 2020, at the height of the coronavirus pandemic.
The ONS confirmed that the collapse in car manufacturing, attributed to the cyber attack and a broader decline in commercial vehicle volumes, knocked 0.17 percentage points off the GDP figure for September.
Broader Economic Weakness
The disappointing figures were not confined to manufacturing. The dominant services sector also showed signs of strain, with its growth rate slowing to 0.2% for the quarter, down from 0.4% in the period between April and June.
Liz McKeown, Director of Economic Statistics at the ONS, said: "Growth slowed further in the third quarter of the year with both services and construction weaker than in the previous period. Across the quarter as a whole manufacturing drove the weakness in production."
She highlighted the "particularly marked fall in car production in September, reflecting the impact of a cyber incident."
Chancellor's Budget Challenge
This latest data presents a challenging backdrop for Chancellor Rachel Reeves ahead of the autumn Budget on November 26.
The 0.1% growth rate for the past three months marks the UK's weakest quarterly performance since the economy experienced a mild recession at the end of 2023.
It also comes just days after the ONS revealed that UK unemployment has risen to 5%, its highest level in four years.
In response to the figures, Chancellor Reeves acknowledged the slowdown but pointed to the UK previously having the fastest-growing economy in the G7 in the first half of the year.
She stated: "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."
