UK Economy Grows 0.1% in Third Quarter 2025 Amid Production Weakness
The UK economy grew by 0.1% in the third quarter of 2025 (July to September), according to early estimates from the Office for National Statistics. This growth rate slowed compared to 0.3% in Q2 and 0.7% in Q1. In September 2025, output contracted by 0.1%, notably impacted by production weaknesses including a cyber attack on Jaguar Land Rover which affected car manufacturing.
Per-head GDP was flat in the third quarter, with services expanding but manufacturing and production sectors weakening. Manufacturing declines were driven by significant drops in car production and pharmaceutical output. Unemployment rose to 5%, up from 4.1% since the Labour government took office, while inflation stood around 3.8%.
The Bank of England is expected to cut interest rates in December 2025 from 4% to 3.75%, with markets anticipating this move following a hold in November. Chancellor Rachel Reeves stated that the upcoming Budget on 26 November 2025 will focus on building an economy that works for working people, including measures aiming to reduce waiting lists, government debt, and the cost of living.
External challenges such as Brexit and the US trade war were cited as factors weighing on the economy. The Opposition Shadow Chancellor criticized the economic figures, claiming that although the Prime Minister and Chancellor hold office, they lack effective power.
