The UK economy registered a modest rebound in the final months of 2025, though growth remained sluggish as the country continued to grapple with the aftermath of a major cyberattack and pre-Budget jitters amongst businesses.
Sluggish Growth Amidst Sectoral Divergence
Fresh data from the Office for National Statistics (ONS) revealed that the economy expanded by just 0.1 per cent in the three months to November 2025. This tepid performance followed a 0.1 per cent contraction in October, which had sparked fears of a quarterly decline.
The meagre growth was driven primarily by the services sector, the largest part of the UK economy, which expanded by 0.2 per cent after being hit by Budget-related turmoil the previous month. However, this positive contribution was heavily offset by significant weakness elsewhere. The construction sector contracted sharply by 1.1 per cent, while production output also fell by 0.1 per cent.
Shadow of the JLR Cyberattack Begins to Lift
Liz McKeown, director of economic statistics at the ONS, stated that the three-month growth figure was "still affected by the cyber incident that impacted car production earlier in Autumn." She was referring to the devastating attack on Jaguar Land Rover, described as the most costly cyberattack in UK history.
There was a silver lining, however. McKeown noted that data for November alone showed the direct impact of the attack on JLR's operations had "largely recovered." In that single month, the economy managed to grow by a more respectable 0.3 per cent, indicating a path towards normalisation.
Business Anxiety and Fiscal Uncertainty
The period was marked by pronounced nervousness in the business community. Countless surveys pointed to firms putting investment decisions on hold in the run-up to Chancellor Rachel Reeves's Autumn Budget on 26 November 2025.
Businesses were described as being "riddled with anxiety," still struggling to digest the historic £40bn tax raid implemented in 2024. A climate of "continuous U-turns and the 'hokey cokey' of tax speculation" amplified fears, with each sector worried it would bear the brunt of new measures as the government sought to build a fiscal buffer against soaring public spending.
The latest figures also followed a belated downgrade of growth for the second quarter of 2025 to 0.2 per cent from an initial estimate of 0.3 per cent. The ONS emphasised that even with the new data, the overarching picture remained one of a concerning slowdown in economic growth throughout the third quarter and towards the end of the year.
