The British economy contracted once again in September, a decline largely driven by the fallout from the cyberattack on automaker Jaguar Land Rover (JLR) and the resulting shutdown of its operations. A new report from the UK’s Office for National Statistics (ONS) records a 0.1% drop in GDP and simultaneously revises August’s figures downward—from the previously reported 0.1% growth to zero.
As a result, the economy grew by only 0.1% over the third quarter, a stark contrast to the beginning of the year, when growth reached 0.7%. Similarly weak performance is being reported across other G7 nations—Germany, Italy, and Canada all noted stagnation or marginal GDP increases of 0–0.1%.
According to Chancellor of the Exchequer Rachel Reeves, the second half of the year demands “decisive yet fair measures” to reinforce the economy and ease the cost of living. She is set to present her second budget in two weeks, promising a focus on reducing public debt and improving the efficiency of the healthcare system.
The ONS report also details the consequences of the crisis at Jaguar Land Rover, which the cyber-monitoring centre classified as a “category 3 systemic event.” Due to production halts and a cascading effect across related industries, vehicle manufacturing in the UK fell by 29%, dragging down overall GDP by 0.17 percentage points.
Even without accounting for the automotive sector, the economy remains sluggish. Ruth Gregory, deputy chief economist at Capital Economics, noted that growth continues to be constrained by high taxation and weak external demand. In her assessment, the scheduled tax increases due to take effect after the upcoming budget could further reduce GDP by approximately 0.2% in 2026, leaving the prospects for faster economic expansion exceedingly limited.
