A manufacturing rebound led by Jaguar Land Rover's recovery from a cyber attack is expected to have boosted UK economic growth in October. Economists forecast the carmaker's gradual return to production from mid-October will help lift the economy, despite businesses holding back ahead of the November 26 Budget. Official gross domestic product (GDP) figures for October will be released on Friday.
Andrew Goodwin, chief UK economist for Oxford Economics, predicts GDP rose 0.1% in October. «Given that production resumed gradually from mid-October, there's likely to have been a partial rebound in manufacturing output that month,» he said. Investec economists forecast a slightly larger 0.2% increase for the month, describing it as «consistent with our view that the economy will have expanded by close to 1.5% over 2025 as a whole».
The anticipated manufacturing recovery comes after the UK economy contracted in September. GDP fell 0.1% that month, with the Office for National Statistics reporting a «marked fall» in car production. The decline was largely attributed to a cyber attack on Jaguar Land Rover, which forced the carmaker to halt production for more than a month.
Pre-Budget uncertainty
Economic activity showed signs of slowdown ahead of the Budget as speculation mounted over potential tax measures. Andy Haldane, former Bank of England chief economist, stated last month that prolonged worries and leaked information about possible tax hikes «caused businesses and consumers to hunker down». Business surveys indicated firms deferred spending decisions and households postponed major purchases until after the Budget.
However, an influential survey by S&P Global reported that private sector activity grew in October, with manufacturing returning to growth. The upturn suggests the economy may have stabilized despite lingering uncertainty.
Note: This article was created with Artificial Intelligence (AI).
