The UK economy surged past expectations in November 2025, driven by a massive rebound in car manufacturing following the “costliest cyberattack in British history.” Data from the Office for National Statistics (ONS) released on Thursday, January 15, 2026, shows that gross domestic product (GDP) grew by 0.3% during the month. This performance outpaced the 0.1% growth predicted by most economists and marked a sharp recovery from the 0.1% contraction seen in October.
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Jaguar Land Rover and the Cyberattack Impacted the UK Economy
The October downturn was largely blamed on the unprecedented halt at Jaguar Land Rover (JLR), which forced the government to provide a £1.5 billion emergency loan guarantee to protect vulnerable suppliers. With production lines in Solihull and Halewood back at full capacity, industrial production accounted for roughly half of the total GDP increase.
Suren Thiru, economics director at the ICAEW, noted that while the boost is welcome, it suggests a return to normal rather than a new era of expansion. He remarked, “November’s uptick means it’s inevitable that the UK economy grew modestly across the final quarter of 2025 with easing uncertainty post-budget likely to have supported growth in December.”
Services Rise While Construction Struggles
While manufacturing led the charge, other areas of the economy showed divergent trends:
- Services: This sector grew by 0.3%, recouping losses from the previous month. Gains were particularly strong in professional and technical activities as businesses finalized plans following the November Budget.
- Construction: The building sector remains the weak link, falling 1.3% in November. This represents the largest three-month decline in nearly three years, casting doubt on the government’s ambitious housing targets.
The UK Economy’s Strength Surprised Many
The surprise strength of the economy has caused traders to rethink the timeline for interest rate cuts. With the UK looking more resilient than the zero growth previously feared by the central bank, the pressure to cut rates aggressively has eased.
Sanjay Raja, chief UK economist at Deutsche Bank (DB), observed that the data changes the math for the Monetary Policy Committee. He noted, “On the margins, this should raise the bar for a February rate cut. With the economy now on a firmer footing than expected, the impetus to accelerate rate cuts is likely lower.”
Despite the November win, economists warn that the true test for the UK economy lies ahead. The £26 billion in tax hikes announced in Chancellor Rachel Reeves’ budget are only just beginning to filter through to business spending and consumer habits.
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