UK GDP growth grinds to halt at 0.1%

UK GDP growth grinds to halt at 0.1%

The UK economy virtually stalled in the third quarter, expanding by just 0.1% between July and September, marking a significant slowdown from the 0.3% growth seen in the previous quarter.

The figures were dragged down by a 0.1% fall in GDP in September, driven by a crippling cyber-attack on Jaguar Land Rover. The Office for National Statistics (ONS) reported that the attack caused car production to collapse by 28.6%, dragging overall manufacturing output down by 2.0% that month and hitting a 73-year low for the motor industry.

However, the weakness was not isolated to September; the ONS revised August’s growth down to zero. The slowdown was broad, with services output growth halving to 0.2%, construction flatlining at 0.1%, and business investment declining by 0.3%.

The data, which was weaker than market forecasts, comes as unemployment recently rose to 5%, a four-year high. The combined weakness has increased expectations that the Bank of England may cut interest rates in December, following a narrow vote to hold them at 4% last week.

The figures present a major challenge for Chancellor Rachel Reeves ahead of her 26 November budget, where she is widely expected to raise taxes. Economists and thinktanks warned that fiscal consolidation could “slam the brakes” on the fragile economy.

A No 10 spokesperson called the figures “disappointing” but insisted the JLR hack was the “primary driver”. Shadow Chancellor Mel Stride criticised the government as being “in office but not in power”.

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