UK Economy Grows 0.1% in Q3 Amid Production Decline

The UK economy expanded by 0.1% in the third quarter of 2025, following a 0.3% growth in the previous quarter, according to preliminary estimates from the Office for National Statistics (ONS). This growth was driven by increases of 0.2% in the services sector and 0.1% in construction, while the production sector contracted by 0.5%.

Liz McKeown, Director of Economic Statistics at the ONS, noted that "growth slowed further in the third quarter of the year with both services and construction weaker than in the previous period. There was also a further contraction in production."

The production sector's decline was significantly impacted by a cyberattack on Jaguar Land Rover, which halted production for five weeks. This disruption led to a 28.6% fall in car production in September, marking the steepest decline since April 2020.

These figures precede the UK's Autumn Budget, scheduled for 26 November 2025. Finance Minister Rachel Reeves is expected to announce measures aimed at addressing the fiscal deficit.

Economists express concerns that potential tax increases could dampen consumer spending and economic activity. However, a possible interest rate cut by the Bank of England at its meeting on 18 December may provide a pre-Christmas boost to the economy.

Scott Gardner, investment strategist at JPMorgan Personal Investing, commented, "All eyes will now be on the upcoming Budget with another weak GDP reading only adding to debates around which levers the Chancellor can pull to stimulate growth."

At its recent meeting, the Bank of England maintained interest rates, with Governor Andrew Bailey indicating that the Monetary Policy Committee seeks additional inflation and labor market data before making further decisions.