UK Economy Barely Grows as September Sees Shock Contraction

UK economic growth slowed to 0.1% for the past three months (Victoria Jones/PA) Victoria Jones

The UK economy grew by just 0.1% between July and September, according to official figures from the Office for National Statistics released Thursday. The slowdown was compounded by a surprise contraction of 0.1% in September alone, falling short of economists' expectations of 0.2% quarterly growth.

The September decline was partly driven by a cyber attack on Jaguar Land Rover that disrupted car production. Manufacturing weakness dominated the quarter, with additional declines in the pharmaceutical industry, services, and construction sectors.

Liz McKeown, ONS director of economic statistics, said: «Growth slowed further in the third quarter of the year with both services and construction weaker than in the previous period.» She noted that manufacturing drove the overall weakness, with «a particularly marked fall in car production in September, reflecting the impact of a cyber incident, as well as a decline in the often-erratic pharmaceutical industry.»

The figures represent a blow to Chancellor Rachel Reeves ahead of her autumn budget on 26 November. The slowdown comes as unemployment has risen from 4.1% to 5% since Labour took power with economic growth as a priority. Business groups have accused the government of harming private sector investment through £25 billion in extra employer taxes announced in recent budget measures.

The weaker-than-expected data is expected to increase pressure on the Bank of England to cut interest rates at its December meeting.

Note: This article was created with Artificial Intelligence (AI).