UK economy grew by just 0.1% in third quarter after hit from JLR cyber-attack
The UK economy expanded by just 0.1% in the quarter from July to September as the crippling cyber-attack on Jaguar Land Rover hit manufacturing.The latest official figures, issued as Rachel Reeves prepares for a crunch budget on 26 November, show gross domestic product fell by 0.1% in September as car production was dragged to a 73-year low by the fallout from the hack.The Office for National Statistics (ONS) highlighted the influence of the cyber-attack, saying: “Production fell by 2.
0% in September 2025 mainly because of a 28.6% fall in the manufacture of motor vehicles, trailers and semi-trailers.”The GDP slowdown began earlier, however, with growth in August – before the cyber-attack hit – revised down to zero from an initial estimate of 0.1%.The third-quarter growth reading of 0.
1% marked a significant slowdown from the 0.3% expansion seen from April to June, and was weaker than the 0.2% expected by markets.September also undershot a forecast of flatlining growth.The gloomier-than-expected figures increased expectations of an interest rate cut from the Bank of England in December, after last week’s narrow vote to hold the rate at 4% when four out of nine members of the monetary policy committee backed a reduction.
The GDP data followed an ONS release on Tuesdaythat showed the unemployment rate had risen to 5%, the highest for four years.Martin Beck, the chief economist at the consultancy WPI Strategy, said: “Combined with a softening labour market, the figures add to evidence that economic and political uncertainty is weighing on activity and leave a Bank of England rate cut in December even more likely.”The chancellor is widely expected to raise taxes in her second budget later this month, to offset a forecast downgrade from the independent Office for Budget Responsibility.Reeves said in a recent speech: “Each of us must do our bit for the security of our country and the brightness of its future.”The weak GDP reading underlined the risks that sharply higher taxes could slam the brakes on the economy.
James Smith, the research director at the Resolution Foundation thinktank, said: “This latest slowdown shows the scale of the challenge facing the government as it seeks to kickstart growth.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.”Alongside the decline in manufacturing output as JLR’s production lines fell silent, the ONS said there had also been a slowdown in the growth of services output in the third quarter, to 0.2%, from 0.4% in the previous three months.
It pointed to a decline in “professional, scientific and technical activities” as the driver of this weaker growth,Sign up to Business TodayGet set for the working day – we'll point you to all the business news and analysis you need every morningafter newsletter promotionConstruction output expanded by just 0,1%, in a worrying sign for a government that has pledged to increase housebuilding significantly,Within that, the ONS said “new work”, rather than repairs, was down by 0,2%.
Labour will not be pleased either with news that business investment declined, by 0.3% on the quarter, to a level just 0.7% higher than a year ago.Boosting private sector investment has been a key aim of the government’s economic strategy.A No 10 spokesperson described the GDP figures as “disappointing”.
“It’s obviously important to recognise the significance of the cyber-attack” on Jaguar Land Rover, which is “clearly the primary driver behind the weaker September figures”, they said.“But we are determined to deliver that growth.We had the fastest-growing economy in G7 in the first half of this year, but there is clearly more to do to build an economy that works for working people.”Asked whether the chancellor should take responsibility for the slowing growth, the spokesperson said: “I don’t accept that.”The shadow chancellor, Mel Stride, said the data was evidence of a prime minister and chancellor who were “in office but not in power”.
Referring to Downing Street briefing about a possible leadership challenge, he added: “If the prime minister does not have the backbone to control his team, he has no hope of reducing spending.”
’Tis the season for dubious TV adverts | Letters
The issues you highlighted in your editorial are real, but please don’t think that advertisers care about them (The Guardian view on the John Lewis Christmas ad: a modern story of fathers and sons, 7 November).This ad is a shameless attempt to make consumers think they are doing something worthwhile in buying overpriced gifts in a failing store that used to share its profits with staff but hasn’t paid them any bonus in the past few years.If anything, the relentless pressure of advertising (where the Christmas season starts earlier each year) only serves to pile more pressure on people who are struggling. The cynicism of these ads – pretending to care while desperately trying to trigger the Pavlovian Christmas shopping response – is truly depressing.Chris LinwardSalford Your editorial’s claim that the new John Lewis Christmas ad was “harking back to the 1990s” and evoked “a less complicated time to be a young man” would be news to anyone who remembers that time as the era of laddism and Loaded, and the underlying unease about men’s emotional lives as shown in novels such as Tim Lott’s White City Blue and Nick Hornby’s About a Boy
US markets struggle amid tech sell-off and economic uncertainty
Wall Street came under pressure on Thursday, enduring its worst day in a month as a sell-off of technology stocks intensified.After an extraordinary rally around hopes for artificial intelligence that propelled global stock markets to record highs, fears that tech firms are now overvalued loom large.Investors are also braced for the release of a batch of official data on the state of the US economy, amid heightened uncertainty over its strength during the federal government shutdown.The benchmark S&P 500 and the Dow Jones industrial average each closed down 1.7% in New York on Thursday, while the tech-focused Nasdaq Composite dropped 2
Thames Water tried to make MP pay its legal fees of up to £1,400 an hour
Thames Water argued that an MP should be forced to pay its hefty legal costs after he represented the interests of the British public in court, a move he described as “retaliation” for pushing for government control of the crisis-hit utility, the Guardian can reveal.The UK’s highest court this week rejected Thames Water’s arguments that the Liberal Democrat MP Charlie Maynard should pay legal fees as high as £1,400 per hour.Britain’s biggest water company has been on the verge of collapse for several years as it struggles under the weight of net debt of £17bn, built up over decades since privatisation. Thames Water’s effective owners have asked for 15 years of leniency from environmental fines from the government to try to recover.Maynard was granted unusual permission to represent the public interest in a court battle over an investor bailout for Thames Water
Pound falls and UK borrowing costs rise as Reeves ditches plans for income tax hike – as it happened
Time to recap…The pound has fallen and the price of UK government borrowing rose today as investors worry over how the Labour government plans to cover its fiscal shortfall in the upcoming budget.It was all in reaction to news that chancellor Rachel Reeves was backtracking on plans to hike income tax rates, in what would have resulted in breaking the party’s manifesto pledge.However, with just two weeks to go until the 26 November fiscal event, it has left investors scratching their heads over how the chancellor plans to raise funds in order to cover policies like increased defence spending or the likely scrapping of the two-child benefit cap.Meanwhile, the FTSE 100 not only suffered from those domestic jitters, but also global fears over an AI tech bubble, which continue to drag on US stocks on Wall Street.Investors are also worried that the Federal Reserve will hold off cutting interest rates in December, and the impact of delayed data on rate decisions, following the US government shutdown
Walmart CEO Doug McMillon to step down after more than a decade in role
Walmart’s CEO, Doug McMillon, will retire next year after more than a decade in charge of one of the world’s largest retailers.John Furner, the chain’s boss in the US, will succeed McMillion as the Bentonville, Arkansas-based grocery retailer’s global CEO after 31 January.Shares in Walmart fell about 3% during premarket trading.Walmart employs 2.1 million workers across the world, including about 1
‘Red cup rebellion’: striking Starbucks baristas urge customers to stay away
At a popular Starbucks in Brooklyn’s Clinton Hill, hundreds of people – including workers, union allies and community supporters – filled the sidewalks. In 40F (4.4C) weather, picketers held signs, marched, and chanted “What’s disgusting? Union-busting!” and “No contract, no coffee!”More than a thousand Starbucks workers across the US walked off the job on Thursday in over 40 cities, marking one of the largest coordinated actions yet by the rapidly growing union movement inside the world’s largest coffee chain.The strike, timed to coincide with the company’s lucrative “red cup day” festivities, is designed to pressure Starbucks back to the bargaining table after months of stalled contract negotiations.In Clinton Hill, many potential customers who stopped by for coffee were successfully deterred, choosing instead to support the strike
‘I’m now a one-issue voter’: US shoppers fear Italian pasta tariff will cause shortage
Jimi Famurewa’s recipe for puff-puff pancakes
Polpa position: budget tinned tomatoes score well in Choice taste test
Three plant-based chocolate mousse recipes by Philip Khoury
Don’t pour that olive brine down the drain – it’s a flavour bomb | Waste not
Jelly’s back! Here are three worth making – and three that should wobble off to the bin