Chancellor Rachel Reeves has been dealt a significant economic setback as official data confirms a sharp slowdown in UK growth during the third quarter of the year.
ONS Data Reveals Slowing Expansion
The Office for National Statistics (ONS) reported that the UK economy grew by just 0.1 per cent between July and September 2025. This figure was unrevised from the initial estimate. Furthermore, growth in the previous quarter was also weaker than first thought, with GDP expansion for the three months to June revised down to 0.2 per cent from an earlier estimate of 0.3 per cent.
Liz McKeown, ONS Director of Economic Statistics, stated that the updated figures painted the same picture as the initial estimate. "Growth in services were partially offset by falls in production, with a marked drop in car manufacturing," she explained, highlighting the impact of a cyber attack on Jaguar Land Rover which knocked activity in the manufacturing sector.
Political Pressure on the Chancellor
The sluggish growth figures represent a fresh political blow for Rachel Reeves, who upon Labour's election victory declared the government's number one mission was to deliver higher economic growth. After delivering two Budgets, she now faces accusations from critics of introducing anti-growth measures, including tax hikes.
Despite the disappointing revisions, some context was provided by the ONS. Growth for the final quarter of 2024 was revised up slightly to 0.3 per cent from 0.2 per cent, although the overall growth for 2024 remained unchanged at 1.1 per cent. The statistics body also noted that, despite the second quarter revision, the UK economy remained the joint fastest growing in the G7 alongside Japan, with growth of 0.9 per cent, followed by the United States.
The new data presents a complex economic landscape for the Chancellor, who arrived in Downing Street with a core promise to turbocharge the economy. The marked drop in car manufacturing underscores ongoing vulnerabilities in key sectors, even as the services industry showed some resilience. With growth stalling, the government's economic strategy is likely to come under intensified scrutiny in the coming months.
