UK Economy Shrinks Unexpectedly Ahead of Budget as Supply Chain Issues Weigh
UK GDP fell by 0.1% in October 2025, following an identical drop in September, contrary to City economists' forecasts of a 0.1% rise in October. This unexpected contraction comes just before Chancellor Rachel Reeves's Budget announcement, amid expectations that the Bank of England (BoE) will deliver a sixth rate cut since last summer as inflation slows and economic growth remains subdued.
The Budget is set to include measures such as energy bill relief, prescription-charge relief, and fuel-duty cuts, which officials suggest could reduce headline inflation by up to 0.5 percentage points next year.
The economic slowdown was influenced by a significant cyber-attack on Jaguar Land Rover (JLR), which halted UK production for several weeks. The breach is estimated to have cost the economy up to £1.9 billion and disrupted hundreds of suppliers. As a result, car output in October fell by approximately one-third. This incident exposed vulnerabilities within the manufacturing supply chain and contributed to the overall deceleration in growth.
