THE UK economy has grown slower than expected in the third quarter of the year, delivering a negligible 0.1% increase, with experts bemoaning a country “officially on life support”.
UK real gross domestic product (GDP) is estimated to have increased by 0.1% in Quarter 3 (July to Sept), compared with growth of 0.3% in Quarter 2 (Apr to June) 2025, official data published today showed.
GDP is estimated to have increased by 1.3% in Quarter 3 2025, compared with the same quarter a year ago.
In output terms, growth in the latest quarter was driven by increases of 0.2% in services and 0.1% in construction; the production sector fell by 0.5%.
Real GDP per head is estimated to have shown no growth in the latest quarter and is up 0.8% compared with the same quarter a year ago.
Liz McKeown, Director of Economic Statistics, ONS, said: “Across the quarter as a whole manufacturing drove the weakness in production. There was a particularly marked fall in car production in September, reflecting the impact of a cyber incident, as well as a decline in the often-erratic pharmaceutical industry.
“Services were the main contributor to growth in the latest quarter, with business rental and leasing, live events and retail performing well, partially offset by falls in R&D and hair and beauty salons.”
Colette Mason, Author & AI Consultant at London-based Clever Clogs AI, said the cybersecurity hack hit the economy.
She added: “We now have statistical proof that a single point of digital failure can create a measurable drag on the national economy. The “JLR effect” moves cybersecurity risk out of the IT department and proves that a lack of systemic resilience is now a core macroeconomic vulnerability.”
Emma Jones, Managing Director at Runcorn-based Whenthebanksaysno.co.uk, said the slowing economy will pile yet more pressure on the government.
She continued: “After unemployment hitting 5% earlier this week, lower than expected GDP growth will pile even more pressure on the government.
“With the Budget looming and more tax hikes potentially to come, 2026 is shaping up to be a seriously challenging year for business.”
Philly Ponniah, Chartered Wealth Manager and Financial Coach at Philly Financial, said she worries for the economy’s near future.
She added: “The outlook feels fragile as we head into the final stretch of the year. People and businesses are waiting for clear signals on tax and any policy changes in the Budget so they can plan with confidence.
“Without consistent policies that support working households and make it easier for firms to invest, growth will stay stuck at the bottom.”
Katy Eatenton, Mortgage & Protection Specialist at St Albans-based Lifetime Wealth Management, said the faltering UK economy meant there was more chance of a Bank of England rate cut.
She added: “The jobs market and economy are officially on life support and we have a Government with no idea how to get us out of this mess.
“On a positive note, the chances of a pre-Christmas rate cut have now risen further, which will deliver some relief to households. If the Government gets this Budget wrong, businesses in all sectors will be in a world of pain.”
Justin Moy, Managing Director at Chelmsford-based EHF Mortgages, said the country is waiting to see the Budget later this month.
He continued: “The UK economy has just about come to standstill, whilst it waits to see what is announced by the Chancellor in one of the most anticipated Budgets in recent times.
“The policy decisions made 12 months ago have finally delivered what everyone knew – increasing taxation just slows the economy, and with more increases expected this will just put the economy in reverse. This all sits on the doorstep of Number 11 and any slither of confidence is quickly evaporating.”
Tony Redondo, Founder at Cosmos Currency Exchange, added: “16 months into the first Labour government for 15 years, and the UK economy continues to be the laggard among its peers, underperforming the OBR’s recent forecasts.]
“The weakness is concentrated in manufacturing and production, with construction barely growing despite housing being a priority, while services continue to do the heavy lifting.
“The real concern is GDP per head showing zero growth, meaning living standards aren’t improving despite headline growth.
“Investment decisions appear to be on hold ahead of the Budget. If the Budget disappoints markets or businesses, Q4 will be weaker still. If it provides clarity and support, pent-up activity could be released. Over to Rachel.”
Photo by Emmanuel Phaeton on Unsplash
