Manufacturing hit by cyber disruption and restructuring
Britain’s economy grew by 0.1% in the third quarter of 2025, the Office for National Statistics confirmed Monday, maintaining its initial estimate despite continued concerns about economic momentum.
The July-to-September growth figure matched economists’ forecasts and marked a slowdown from the second quarter, which was revised down to 0.2% from an earlier estimate of 0.3%, according to ONS data.
The figures showed gross domestic product was 1.3% higher than the same quarter a year earlier, while output per head rose 0.9% year on year. On a quarterly basis, however, real GDP per head showed no growth, the first such outcome after six consecutive quarters of expansion.
Growth in the third quarter was driven by increases of 0.2% in both the services and construction sectors, while production fell 0.3%. Within services, 10 of 14 subsectors contributed positively, with financial and insurance activities providing the largest lift at 1.0%.
Manufacturing contracted by 0.8%, weighed down by a 4.7% drop in transport equipment output. The Society of Motor Manufacturers and Traders said much of the decline reflected a cyber incident that halted production at a major manufacturer in September, alongside plant restructuring that reduced commercial vehicle volumes.
Britain’s current account deficit narrowed to £12.1bn in the third quarter, equivalent to 1.6% of GDP. That compared with 2.8% in the second quarter and was below the £21.1bn forecast by economists polled by Reuters.
The household saving ratio fell to 9.5% from 10.2% in the previous quarter, while real household disposable income per head declined 0.8% after showing no change in the second quarter.
Reuters noted that the Bank of England said last week it expected zero GDP growth in the October-to-December period, though it assessed the underlying pace of expansion at about 0.2% per quarter. The central bank has cut interest rates by 25 basis points to 3.75% and indicated the rate path would remain “gradually downwards”, a report from FXStreet noted.
For 2024 as a whole, GDP rose by an unrevised 1.1%, the ONS said.
Sterling rose after the data release, trading higher against major peers, though analysts said the move was likely to be short-lived amid ongoing concerns about fourth-quarter performance.
