Introduction: UK car sales rose around 14% last month
Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy.
UK car sales have climbed for the 15th month running, as the industry continues to shake off the supply chain problems suffered in the Covid-19 pandemic.
Registrations of new vehicles rose 14% year-on-year in October, according to preliminary figures from the Society of Motor Manufacturers and Traders. That extends a run of gains that began in August 2022.
Mike Hawes, chief executive of SMMT, says new car registrations have finally returned to pre-pandemic levels, after four years of disruption.
He told Radio 4’s Today programme that the supply chain issues the industry faced globally (such as shortages of semiconductors) have been easing.
We’ve been able to shore up demand, and the wait lists that so many people were experiencing over the last two or three years have eased, so we’ve been able to fulfill the level of demand that’s there.
The final sales figures for October are due at 9am.
A month ago, the SMMT reported a drop in the number of consumers buying electric cars, which is blames on a lack of incentives for households to shift to EVs.
Hawes says that business customers and fleet buyers are driving take-up of EVs, as they get the benefits of lower “Benefit in Kind” taxation on electric cars than other models.
Private buyers don’t get the same incentives, Hawes argues, so they need to calculate whether they’d be better off with an EV or not.
Repeating the SMMT’s previous calls for more incentives for consumers to buy EV cars, Hawes says:
”If we going to move the entire market, which we need to do, the government needs to be looking at pulling every single lever to try to incentivise this transition.”
Looking ahead, Hawes predicts that sales growth will probably tale off a little in the months ahead.
But, as he points out, car sales have been “counter-cyclical given the economic conditions”, and the SMMT still expects the market to grow next year.
Also coming up today
In the energy sector, Rishi Sunak will introduce an annual system to award new oil and gas licences.
The move, expected in tomorrow’s kings speech, is likely to anger environmental campaigners, as the PM looks to find new dividing lines with the Labour party ahead of the next election.
We also get a new healthcheck on UK building firms, eurozone services companies and German factories.
The agenda
-
7am GMT: German factory orders for September
-
9am GMT: UK car sales for October
-
9am GMT: Eurozone services PMI for October
-
9.30am GMT: UK construction PMI for October
-
5pm GMT: Virtual Q&A with Bank of England chief economist Huw Pill
Key events
UK “is probably already in recession”: Bloomberg analysis
Analysis by Bloomberg Economics this morning shows that Britain could already be falling into recession.
The research shows a 52% chance that the economy contracted in the third quarter of 2023, and also shrinks again in the current quarter, as household spending is hit by high interest rates and rising unemployment.
That would meet the technical definition of a recession (two consecutive quarters of contraction).
Bloomberg points out:
A recession would be a headache for Prime Minister Rishi Sunak, due to fight an election next year. A recession could increase the chances of the Bank of England pivoting toward reducing interest rates, especially if inflation has come down sharply.
Last week, the BoE said there was a 50-50 chance of a recession by the middle of next year.
Introduction: UK car sales rose around 14% last month
Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy.
UK car sales have climbed for the 15th month running, as the industry continues to shake off the supply chain problems suffered in the Covid-19 pandemic.
Registrations of new vehicles rose 14% year-on-year in October, according to preliminary figures from the Society of Motor Manufacturers and Traders. That extends a run of gains that began in August 2022.
Mike Hawes, chief executive of SMMT, says new car registrations have finally returned to pre-pandemic levels, after four years of disruption.
He told Radio 4’s Today programme that the supply chain issues the industry faced globally (such as shortages of semiconductors) have been easing.
We’ve been able to shore up demand, and the wait lists that so many people were experiencing over the last two or three years have eased, so we’ve been able to fulfill the level of demand that’s there.
The final sales figures for October are due at 9am.
A month ago, the SMMT reported a drop in the number of consumers buying electric cars, which is blames on a lack of incentives for households to shift to EVs.
Hawes says that business customers and fleet buyers are driving take-up of EVs, as they get the benefits of lower “Benefit in Kind” taxation on electric cars than other models.
Private buyers don’t get the same incentives, Hawes argues, so they need to calculate whether they’d be better off with an EV or not.
Repeating the SMMT’s previous calls for more incentives for consumers to buy EV cars, Hawes says:
”If we going to move the entire market, which we need to do, the government needs to be looking at pulling every single lever to try to incentivise this transition.”
Looking ahead, Hawes predicts that sales growth will probably tale off a little in the months ahead.
But, as he points out, car sales have been “counter-cyclical given the economic conditions”, and the SMMT still expects the market to grow next year.
Also coming up today
In the energy sector, Rishi Sunak will introduce an annual system to award new oil and gas licences.
The move, expected in tomorrow’s kings speech, is likely to anger environmental campaigners, as the PM looks to find new dividing lines with the Labour party ahead of the next election.
We also get a new healthcheck on UK building firms, eurozone services companies and German factories.
The agenda
-
7am GMT: German factory orders for September
-
9am GMT: UK car sales for October
-
9am GMT: Eurozone services PMI for October
-
9.30am GMT: UK construction PMI for October
-
5pm GMT: Virtual Q&A with Bank of England chief economist Huw Pill