A sophisticated cyber attack on Jaguar Land Rover has delivered an unprecedented blow to the UK economy, single-handedly pushing growth figures into negative territory just weeks before Chancellor Rachel Reeves's crucial second budget.
The Hack That Halted Growth
Official figures reveal that UK gross domestic product fell by 0.1% in September 2025 – a decline directly attributable to the devastating cyber attack that crippled production at Britain's largest car manufacturer. Without the 28.6% collapse in car production that month, the economy would have recorded 0.1% growth.
This represents the largest monthly drop in car output in modern records outside of the pandemic period. While some van plants also experienced downtime, economists conservatively estimate that approximately half of the production decline stemmed directly from the JLR shutdown.
Budget Implications for Rachel Reeves
The timing couldn't be worse for the Chancellor. Rachel Reeves now faces the extraordinary challenge of preparing her budget against the backdrop of an economy essentially flatlining. The cyber attack's impact highlights both the vulnerability of Britain's concentrated car industry and the precarious position of the wider economy.
As Ed Conway, Sky's Economics and Data Editor, noted on Thursday 13 November 2025, the main reason this single incident could determine whether GDP rose or fell is that growth was already hovering near zero before the hack.
Broader Economic Consequences
The implications extend far beyond one company's production troubles. Flatlining economic output means Britons are seeing slower improvements in living standards and the Treasury faces growing fiscal challenges.
Lower GDP translates directly into reduced tax revenue for the Exchequer, potentially widening the deficit. This comes as the Office for Budget Responsibility is expected to downgrade its underlying growth forecasts, further complicating the Chancellor's budgetary calculations.
Reeves must now navigate multiple pressing issues with diminished economic tailwinds: funding government U-turns on winter fuel and benefits reforms, addressing long-term worklessness, protecting capital spending commitments, and managing global trade war repercussions.
What would have been challenging with traditional 2.5% trend growth has become an extraordinarily difficult task with the economy balanced on a knife-edge, demonstrating how vulnerable modern economies remain to targeted cyber threats.
