The United Kingdom’s economy grew by just 0.1% in the third quarter of 2025, according to preliminary data from the Office for National Statistics (ONS). This uk economy growth slower figure falls short of economists’ forecasts and comes ahead of the nation’s upcoming Autumn Budget on November 26.
Economists had predicted a 0.2% expansion for the July–September period, following a 0.3% rise in the previous quarter. However, the latest data indicates that both the services and construction sectors weakened, while manufacturing output contracted, further slowing the pace of recovery. Month-on-month, GDP slipped by 0.1% in September, following flat growth in August.
Manufacturing Weakness and Cyber Disruptions
According to Liz McKeown, Director of Economic Statistics at the ONS, the decline was largely driven by weakness in manufacturing. A major factor behind the slowdown was the cyberattack on Jaguar Land Rover, which disrupted production for nearly five weeks. This interruption significantly reduced output in the automotive sector during September, contributing to the uk economy growth slower trend.
McKeown also noted a “marked fall in car production” and additional fluctuations in the pharmaceutical industry, describing them as key contributors to the overall production downturn. The ONS highlighted that the combination of industrial challenges and reduced consumer activity weighed on overall growth during the quarter.
Analysts Eye Upcoming Budget for Recovery Signals
The weak growth figures arrive just weeks before the Autumn Budget, which many analysts view as a critical test for the government’s economic strategy. While some investors anticipate fiscal tightening, others hope for policy measures that could support consumer and business confidence through the winter months.
Scott Gardner, investment strategist at JPMorgan Personal Investing, said the latest GDP data increases focus on how the upcoming Budget will address uk economy growth slower. “Boosting housing market activity is key to unlocking sustained expansion,” Gardner noted, adding that potential tax increases could still place pressure on household spending in early 2026.
Business leaders have also voiced concerns about prolonged uncertainty. Amanda Blanc, CEO of Aviva, told CNBC that “businesses and consumers are anxious to see clarity,” emphasizing that clear fiscal direction is essential for planning and investment.
Hopes for a Monetary Policy Boost
Attention is also turning toward the Bank of England, whose next meeting on December 18 may bring an interest rate cut — a move some analysts believe could provide a short-term lift to the economy. Despite holding rates steady at its last meeting, Bank officials indicated they would reassess after reviewing new inflation and labor market data, especially in light of the uk economy growth slower trend.
Rob Wood, chief UK economist at Pantheon Macroeconomics, suggested that even modest growth might not prevent a rate reduction next month. “We expect the Monetary Policy Committee to lower rates in December, as fiscal tightening from the upcoming Budget will likely weigh on output,” Wood said.
He added that while growth has shown some resilience, it remains close to the UK’s long-term potential of 0.3% per quarter, leaving limited room for stronger expansion without additional policy support.
Outlook for Businesses and Investors
With both fiscal and monetary decisions approaching, business owners and investors are watching closely for signs of stability. The combination of uk economy growth slower, supply disruptions, and uncertain consumer sentiment suggests a challenging environment heading into 2026.
For now, many analysts agree that the coming weeks — particularly the Autumn Budget and the Bank of England’s final meeting of the year — will play a decisive role in shaping the UK’s economic direction in the months ahead.
Sources:
