Car sales slump in Britain as Brexit uncertainty, higher inflation depress spending

Source: Xinhua| 2017-11-08 03:44:35|Editor: yan
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LONDON, Nov. 7 (Xinhua) -- Britain's car sales and sales of vehicles to businesses were both depressed, according to new figures which show that inflation and Brexit uncertainty are hanging over the growth of the British economy.

Official statistics for October released Tuesday by the Society of Motor Manufacturers & Traders (SMMT) showed a sharp decline in the volume of sales, a trend that began in the summer and which has continued.

The SMMT figures has showed that new car sales had fallen for the seventh successive month, and were 12 percent down on the previous year.

Private new car registrations fell 10.1 percent year-over-year in October, compounding the retraction in the sector seen in September's 8.8 percent drop, with consumers unwilling to make major purchases against a background of uncertainty.

Fleet car sales to businesses were down even more sharply, with a 13 percent annual fall, with firms becoming more cautious in their car purchases in response to modest economic activity and heightened economic and political uncertainties over Brexit.

"Car registrations still are falling at an alarming rate, highlighting how reluctant consumers currently are to make financial commitments," Samuel Tombs, chief British economist at Pantheon Macroeconomics, a London financial data analysis firm, told Xinhua.

The central bank the Bank of England (BoE) last week unwound one of its emergency stimulus measures enacted in the wake of the Brexit referendum vote in 2016.

The BoE decided to raise the bank rate from the record low of 0.25 percent set in August last year, to 0.5 percent, a level held from March 2009 to August.

This rise in the cost of borrowing will have a detrimental effect on the sector in the future.

"The downward trend likely will be amplified by increases in personal loan rates in response to last week's Bank Rate hike. The outlook for car sales looks bleak," said Tombs.

"The recent further decline in consumer confidence indicates that car registrations will continue to fall well into 2018."