Fri, 12 Dec 2025

Fri, 12 Dec 2025 UK economy shrank unexpectedly by 0.1% in October

The impact of the JLR cyber-attack continued to affect output, while analysts say spending was hit by Budget uncertainty.

* The UK's economy shrank by 0.1% in October, contradicting economists' expectations of a 0.1% growth.
* The economy also contracted by 0.1% over the three months to October.
* The cyber-attack on Jaguar Land Rover continued to affect car production, with only a slight recovery in October.
* Analysts said uncertainty ahead of the Budget had slowed consumer and business spending.
* The weaker-than-expected figures strengthen the case for the Bank of England to cut interest rates next week.
* The government has made economic growth one of its key priorities, but shadow chancellor Sir Mel Stride blamed the Budget for the unexpected contraction.
* Experts agree that the economy's performance is weak, with one analyst saying it is "unambiguously weak" and another describing it as a "further reason to expect the Bank of England to cut interest rates".
* The services sector did not grow at all in the three months to October, while vehicle manufacturing fell by 17.7% over that period.
* Analysts point out that the economy has only grown in one of the past seven months, and some suggest that investment from the private sector and government could help foster growth over the coming year.
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