Government publishes independent study revealing cost of cyber attacks to UK economy

Government publishes independent study revealing cost of cyber attacks to UK economy

New independent research from DSIT reveals the scale of economic disruption caused by cyber-attacks across UK sectors. From fraud and IP theft to service outages and infrastructure risks, the findings highlight why stronger, economy-wide resilience measures are essential.

On Wednesday 12 November, the Department for Science, Innovation and Technology (DSIT) published independent research examining the economic impact of cyber-attacks in the UK . The research is comprised of five reports conducted by KPMG, Alma Economics, and Frontier Economics.

The study includes five research papers analysing the following areas: sector-specific costs , intellectual property and knowledge asset theft , fraud resulting from data breaches , consumer impact , and disruptions to rail networks .

Summary of research papers

1. Sector specific costings

KPMG’s analysis of the cost of cyber-attacks on individual businesses is broken down by sector and business size. The study considered two key variables: the average cost of a cyber-attack and the likelihood of experiencing one. The findings are based on potential outcomes and are intended to provide indicative estimates rather than precise figures.

Sectors incurring the highest average costs include information services, management, entertainment, manufacturing, and financial services, each losing more than £300,000 per incident.

Economic Modelling of Sector Specific Costings of Cyber Attacks, KPMG

2. Cost of IP and knowledge asset theft

Alma Economics report focuses on the economic impact on intellectual property and knowledge assets theft. The analysis is based on a literature review, expert input, regression modelling and case studies.

The report found that small to medium-sized enterprises (SMEs) are at a high risk of IP attacks as rival product development is more challenging to recover from.

Economic Impact of Intellectual Property and Knowledge Assets Theft from Cyber Attacks in the UK, Alma Economics

3. Cost of fraud due to data breaches

The Frontier Economics report examines the estimated cost of individual fraud cases enabled by data obtained through organisational data breaches. The study provides a strong indication of the scale of economic disruption. Key findings include:

Assessing the Feasibility of Modelling the Link Between Data Breaches and Fraud, Frontier Economics

4. Impact on consumers

The KPMG report examines the impact of cyber-attacks on consumers across five key sectors. The economic value of these losses is based on the disruption of services and restricted access to goods. Key findings include:

The Economic Impact on Consumers of Cyber Attacks, KPMG

5.Impact of the rail network

The KPMG report outlines the economic impact of a cyber-attack on rail network. The analysis indicates that an attack on rail services would have severe consequences. A systemic cyber incident is estimated to cost £1.8 billion for a one-week period of disruption. This hypothetical scenario would include:

The Economic Impact of a Systemic Cyber Incident to the Rail Network, KPMG

This research was published by government to support the introduction of the Cyber Security and Resilience (Network and Information Systems) Bill. The Bill is designed to strengthen the UK’s cyber defences across critical sectors, including water, energy, healthcare, transport and digital services.

However, the research highlighted several sectors which are not directly in scope of the Bill. These sectors which include, manufacturing, real estate and renting, and the creative industries, have the potential to cause significant disruption to essential services and the distribution of goods across the UK. Recent cyber-attacks have shown how incidents in these sectors can create knock-on effects for the wider economy. It is important that government consider additional measures which will boost economy-wide resilience, even for sectors that are not directly covered by the new legislation.

techUK looks forward to continuing engaging with research and development in this area and helping to build a stronger economy through the growth of a cyber resilient UK.

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