UK growth slows down to a crawl in Q3 ahead of crucial budget
[November 13, 2025] By
PAN PYLAS
LONDON (AP) — U.K. economic growth slowed down to a near standstill in
the third quarter of the year after a cyberattack halted production at
the country's biggest automaker, official figures showed Thursday.
The slowdown represents a blow to the British government less than two
weeks ahead of a crucial budget that is expected to see taxes rise
again.
The Office for National Statistics said that the economy grew by 0.1%
between July and September from the previous three-month period. That
was down on the previous quarter's 0.3% increase and below market
expectations for a 0.2% rise.
The cyberattack on Jaguar Land Rover was a key reason why growth came in
lower than expected. The attack, which saw workers sent home on Aug. 31,
halted production in the company's factories as well as suppliers.
Operations restarted in October.
The shutdown rippled through the U.K. auto industry. JLR, which is owned
by India’s Tata Motors, employs more than 30,000 people, with its supply
chain supporting tens of thousands more jobs.
The impact was evident in the growth performance in September, with
overall industrial output down 2% during the month and car and trailer
manufacturing plunging by 28.6%, its sharpest fall since the height of
the coronavirus pandemic in April 2020.
It is the latest set of disappointing economic data for the government
after the statistics agency revealed earlier this week that U.K.
unemployment has risen to 5%, its highest level for four years.
Statistics point towards a weakening economic backdrop ahead of the
budget on Nov. 26, which the government has sought to blame on
international factors, such as the uncertainty caused by U.S. tariffs.
Treasury chief Rachel Reeves would have been hoping that stronger
economic growth could help bolster tax revenues and support spending
plans.
“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," she said.
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Britain's Chancellor of the Exchequer Rachel Reeves arrives to
deliver a speech in the media briefing room of 9 Downing Street,
London, Tuesday Nov. 4, 2025. (Justin Tallis/Pool Photo via AP)
 Reeves has provided clear hints that
she is going to have to raise taxes in order to plug a hole in the
public finances. She is widely anticipated to increase the basic
rate of income tax, something no British government has done for 50
years. It would also break a key manifesto pledge of the Labour
government.
It's a high-stakes time for the government, which is languishing in
the opinion polls barely a year-and-a-half after coming to power and
Prime Minister Keir Starmer's favorability ratings deep in negative
territory.
Starmer has said that generating economic growth is his government's
central mission. Since the global financial crisis in 2008, the
British economy's growth rates have been lower than the decades
before, and that's had a knock-on impact on the government's tax
take and its ability to fund public services.
“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,” said James Smith,
research director at the Resolution Foundation.
Opposition politicians say Labour has done more harm than good since
it came to power, and have pinned the blame largely on Reeves'
budget last year, which saw taxes raised on businesses.
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