Rachel Reeves has been delivered a blow as economic growth has slowed over the past three months ahead of the Autumn Budget.
Figures shows the economy declined by 0.1% in September following the cyber attack on Jaguar Land Rover.
Between July and September gross domestic product (GDP) grew by 0.1%, according to the Office for National Statistics (ONS) after a 0.3% rise between April and June, this is weaker than what economists were expecting as they predicted a 0.2% in the quarter.
In the month production output fell 2% and car and trailer manufacturing plummeted by 28.6%, this is largest fall since 2000 during the pandemic.
ONS director of economic statistics Liz McKeown said: “Growth slowed further in the third quarter of the year with both services and construction weaker than in the previous period.
“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.”
The Chancellor said in response, “We had the fastest-growing economy in the G7 in the first half of the year, but there’s more to do to build an economy that works for working people.
“At my Budget later this month, I will take the fair decisions to build a strong economy that helps us to continue to cut waiting lists, cut the national debt and cut the cost of living.”
Ben Jones, CBI Lead Economist, said, “The latest data underline how fragile the recovery remains, with the economy close to flatlining.
“Weak activity and waning confidence ahead of the Budget are clear warning signs that the government’s growth mission is faltering.
“The Chancellor faces a pivotal choice later this month. Businesses need a clear signal that the Government is serious about unlocking investment and boosting competitiveness – not another round of tax rises or short-term fixes that would deepen the drag on growth.”
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