(qlmbusinessnews.com . Fri 14th Nov, 2025) London, UK —
Jaguar Land Rover Cyber Attack: A Catalyst for UK's Declining Economic Momentum
UK Economic Growth Stalls Amid Car Production Downturn
The rate of growth within the UK economy has dwindled to a mere 0.1% in the third quarter, a stark contrast to the anticipated 0.2%, igniting concerns just before Chancellor Rachel Reeves is set to present her Budget, sources indicate. The slowdown, further highlighted by a significant drop in car production, presents a direct challenge to Reeves, who has often cited economic growth as her primary focus.
According to the Office for National Statistics (ONS), a notable decline was observed in September's car production figures, largely attributed to a cyber-attack on Jaguar Land Rover, Britain's renowned automotive company. The incident not only strained this sector but also subtly indicated frailties across other economic divisions.
Despite modest upticks in the services and construction sectors, their growth rates failed to match those of the preceding quarters, the ONS reported. With consumer spending on a faltering path, projections suggest continued pressures on economic expansion through to year-end.
The economy's performance in the July-September window marks a deceleration from the 0.3% and 0.7% growth rates recorded in the second and first quarters, respectively. In particular, September saw a contraction of 0.1%, closely connected to the repercussions of the cyber onslaught on Jaguar Land Rover, which ceased its production lines for an extensive five weeks from August 31.
Overall, September's industrial output reeled from a 2% dip, led primarily by a 28.6% plummet in car production, the ONS elaborated. The implications of these subdued growth figures, alongside weak employment data released earlier, may nudge the Bank of England towards a rate reduction next month, some analysts speculate.
Pantheon Macroeconomics’ Rob Wood, a chief UK economist, expressed that the combined data “all but seals a December rate cut.” Meanwhile, certain business sectors attribute this sluggish growth to the ramifications of last year's Budget adjustments, which elevated National Insurance contributions for employers and raised the national living wage.
Allan Jones of TC Morris, a pie manufacturing firm based in Dudley, West Midlands, disclosed a £200,000 surge in operational costs this year, attributing part of the financial strain to policy-induced wage increments. He voiced hopes for relief in the upcoming Budget through tax cuts, reduced energy expenses, and enhanced support for investment initiatives.
Chancellor Reeves, while acknowledging the UK's lead in G7 growth rates in the year's first half, admitted, “there's more to do to build an economy that works for working people.” Her statement comes amid scrutiny from Shadow Chancellor Mel Stride, who critiqued the leadership's grasp on economic stewardship.
ONS’s Liz McKeown pointed out September's significant reduction in car production, pinning it on the cyber incident at Jaguar Land Rover, notwithstanding gains in services like retail, business rental, and live events.
Capital Economics’ Ruth Gregory highlighted that, excluding the Jaguar Land Rover episode, the UK's economic momentum appears lacklustre, cautioning that the forthcoming Budget's expected tax hikes could further stifle growth prospects.
As the Budget announcement looms, all eyes are on Chancellor Rachel Reeves' strategy to navigate these economic challenges, with the ultimate goal of fostering a resilient, growth-oriented economy for the UK.
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