UK growth slows down to a crawl in Q3 ahead of crucial budget

LONDON -- U.K. economical maturation slowed down to a adjacent standstill successful the 3rd 4th of the twelvemonth aft a cyberattack halted accumulation astatine the country's biggest automaker, authoritative figures showed Thursday.

The slowdown represents a stroke to the British authorities little than 2 weeks up of a important fund that is expected to spot taxes emergence again.

The Office for National Statistics said that the system grew by 0.1% betwixt July and September from the erstwhile three-month period. That was down connected the erstwhile quarter's 0.3% summation and beneath marketplace expectations for a 0.2% rise.

The cyberattack connected Jaguar Land Rover was a cardinal crushed wherefore maturation came successful little than expected. The attack, which saw workers sent location connected Aug. 31, halted accumulation successful the company's factories arsenic good arsenic suppliers. Operations restarted successful October.

The shutdown rippled done the U.K. car industry. JLR, which is owned by India’s Tata Motors, employs much than 30,000 people, with its proviso concatenation supporting tens of thousands much jobs.

The interaction was evident successful the maturation show successful September, with wide concern output down 2% during the period and car and trailer manufacturing plunging by 28.6%, its sharpest autumn since the tallness of the coronavirus pandemic successful April 2020.

It is the latest acceptable of disappointing economical information for the authorities aft the statistic bureau revealed earlier this week that U.K. unemployment has risen to 5%, its highest level for 4 years.

Statistics constituent towards a weakening economical backdrop up of the fund connected Nov. 26, which the authorities has sought to blame connected planetary factors, specified arsenic the uncertainty caused by U.S. tariffs.

Treasury main Rachel Reeves would person been hoping that stronger economical maturation could assistance bolster taxation revenues and enactment spending plans.

“At my fund aboriginal this month, I volition instrumentality the just decisions to physique a beardown system that helps america to proceed to chopped waiting lists, chopped the nationalist indebtedness and chopped the outgo of living," she said.

Reeves has provided wide hints that she is going to person to rise taxes successful bid to plug a spread successful the nationalist finances. She is wide anticipated to summation the basal complaint of income tax, thing nary British authorities has done for 50 years. It would besides interruption a cardinal manifesto pledge of the Labour government.

It's a high-stakes clip for the government, which is languishing successful the sentiment polls hardly a year-and-a-half aft coming to powerfulness and Prime Minister Keir Starmer's favorability ratings heavy successful antagonistic territory.

Starmer has said that generating economical maturation is his government's cardinal mission. Since the planetary fiscal situation successful 2008, the British economy's maturation rates person been little than the decades before, and that's had a knock-on interaction connected the government's taxation instrumentality and its quality to money nationalist services.

“The adjacent situation volition beryllium to guarantee that the upcoming fund supports alternatively than hinders maturation — nary mean feat fixed the standard of fiscal consolidation that is expected,” said James Smith, probe manager astatine the Resolution Foundation.

Opposition politicians accidental Labour has done much harm than bully since it came to power, and person pinned the blasted mostly connected Reeves' fund past year, which saw taxes raised connected businesses.