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You can find the current article at its original source at https://www.theguardian.com/business/live/2018/jan/05/uk-car-sales-brexit-us-unemployment-stock-markets-business-live
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| UK car industry demands Brexit clarity after biggest sales fall since 2009 - business live | UK car industry demands Brexit clarity after biggest sales fall since 2009 - business live |
| (35 minutes later) | |
| Newsflash: Britain’s FTSE 100 has hit a fresh intraday record high. | |
| The index of blue-chip companies gained another 12 points, or 0.15% points, to 7708 points, six points above yesterday’s record levels. | |
| Rebecca O’Keeffe, head of investment at interactive investor, says investor optimism is undimmed, for the moment.... | |
| European markets continue to make further gains, with the sheer scale of the global rally demonstrating how investors are embracing all things equity and risk related, basking in the euphoria of synchronous global growth. Equity markets, which were already strengthening well in advance of Trump’s $1.5tn tax cut, or indeed a prospective US infrastructure bill that could form the centrepiece of 2018 legislation, show no sign of any stress, with new record highs an almost daily occurrence. | |
| With the party in full swing and implied volatility at such low levels, markets are seemingly immune to any possible downside, but the key risk that might ultimately bring markets down is inflation. A material increase in inflationary pressures would potentially force central banks to tighten rates faster than the market is expecting | |
| Chris Bosworth, Director of Strategy at Close Brothers Motor Finance, believes Brexit anxiety and opposition to diesel cars are the main reason car sales fell last year. | |
| “Today’s figures reflect the impact that anti-diesel messages from the government and ongoing Brexit trade negotiations are having on both business and consumer confidence across the motor industry. | |
| December marks the ninth month of consecutive decrease in new car sales as squeezed consumers are reluctant to purchase big ticket items such as cars and motorcycles. | |
| Alex Buttle, director of car buying comparison website Motorway.co.uk, says diesel’s days are numbered (after the emissions scandal). He wants the government to offer more incentives to shift to electric. | |
| “Quite frankly, 2017 has been a year to forget for the UK car industry. | |
| “You’d have to dig pretty deep to find anything positive to take from the past 12 months which has seen diesel demonised in the media on a weekly basis. | |
| “As sales of new diesels continue to fall, 2017 could well mark the end of one era of motoring and the dawn of a new one, as hybrid and electric sales start to take off. “The destiny of diesel may already be set in stone. | |
| Now the Government needs to stand by its commitment to the future and put its full backing behind AFVs. | |
| “Incentives to encourage consumers to switch to hybrid and electric vehicles need to run alongside the billions of pounds of investment being pumped into the supporting infrastructure. | |
| Bloomberg blames “Brexit’s impact on buyer confidence and lingering skepticism over the emissions performance of diesel cars” for the 5.6% drop in UK car sales last year. | Bloomberg blames “Brexit’s impact on buyer confidence and lingering skepticism over the emissions performance of diesel cars” for the 5.6% drop in UK car sales last year. |
| UK car sales suffered their biggest annual slide since the global recession, stunted by #Brexit’s impact on buyer confidence and lingering skepticism over the emissions performance of diesel cars https://t.co/k9MRnr09rA via @_benkatz #tictocnews pic.twitter.com/KBwoINpDZg | UK car sales suffered their biggest annual slide since the global recession, stunted by #Brexit’s impact on buyer confidence and lingering skepticism over the emissions performance of diesel cars https://t.co/k9MRnr09rA via @_benkatz #tictocnews pic.twitter.com/KBwoINpDZg |
| The Financial Times agrees that Britain’s car industry needs clarity about the UK’s future relationship with the EU, fast: | The Financial Times agrees that Britain’s car industry needs clarity about the UK’s future relationship with the EU, fast: |
| You can’t wait until March 2019,” [SMMT chief Mike Hawes] said, when the UK will leave the EU. | You can’t wait until March 2019,” [SMMT chief Mike Hawes] said, when the UK will leave the EU. |
| “Production is a tap that takes a long time to turn on and off.” | “Production is a tap that takes a long time to turn on and off.” |
| The SMMT said contingency plans could include carmakers investing in additional warehouse capacity to guard against delivery disruptions, or deciding to expand production abroad rather than produce new models in the UK. | The SMMT said contingency plans could include carmakers investing in additional warehouse capacity to guard against delivery disruptions, or deciding to expand production abroad rather than produce new models in the UK. |
| Mr Hawes said that even the more limited changes, such as investing in warehouse capacity, were the “thin end of the wedge” because they would impose additional costs on British car manufacturers, making them less competitive and damaging their ability to attract new investment. | Mr Hawes said that even the more limited changes, such as investing in warehouse capacity, were the “thin end of the wedge” because they would impose additional costs on British car manufacturers, making them less competitive and damaging their ability to attract new investment. |
| It’s official: Britain’s car industry has suffered its biggest drop in sales since the financial crisis. | It’s official: Britain’s car industry has suffered its biggest drop in sales since the financial crisis. |
| Sales of new vehicles fell by 5.6% during 2017 - the first annual decline since 2011, and the worst since 2009. | Sales of new vehicles fell by 5.6% during 2017 - the first annual decline since 2011, and the worst since 2009. |
| Diesel sales were particularly dire, as my colleague Gwyn Topham explains: | Diesel sales were particularly dire, as my colleague Gwyn Topham explains: |
| UK car sales declined in 2017 after five years of rapid growth, with the industry blaming government for a collapse in consumer confidence in diesel vehicles. | UK car sales declined in 2017 after five years of rapid growth, with the industry blaming government for a collapse in consumer confidence in diesel vehicles. |
| Total sales for last year were 2.54m new vehicles, a decline of 5.6% on 2016, with diesel sales dropping 17%. Despite the decline, 2017 sales remained near the highest on record. | Total sales for last year were 2.54m new vehicles, a decline of 5.6% on 2016, with diesel sales dropping 17%. Despite the decline, 2017 sales remained near the highest on record. |
| The Society of Motor Manufacturers and Traders (SMMT), the UK automotive industry’s trade body, has forecast a further 5% to 7% decline in sales in 2018. | The Society of Motor Manufacturers and Traders (SMMT), the UK automotive industry’s trade body, has forecast a further 5% to 7% decline in sales in 2018. |
| Mike Hawes, the SMMT’s chief executive, said 2017 had been a “very volatile year”. | Mike Hawes, the SMMT’s chief executive, said 2017 had been a “very volatile year”. |
| While sales reached a record high in March, by December they were 13.9% down year-on-year, with 152,000 fewer cars sold than in the same month in 2016. | While sales reached a record high in March, by December they were 13.9% down year-on-year, with 152,000 fewer cars sold than in the same month in 2016. |
| Hawes attributed the drop to a decline in business and consumer confidence in the wider economy and uncertainty over the future of diesel. | Hawes attributed the drop to a decline in business and consumer confidence in the wider economy and uncertainty over the future of diesel. |
| Sales of diesel cars dropped by 31% in December, while petrol car sales dropped by 1.6%, after relatively minor tax changes targeting diesel in the November budget. | Sales of diesel cars dropped by 31% in December, while petrol car sales dropped by 1.6%, after relatively minor tax changes targeting diesel in the November budget. |
| The SMMT is now urging the UK government to rapidly agree a Brexit transition deal with Brussels. | The SMMT is now urging the UK government to rapidly agree a Brexit transition deal with Brussels. |
| Otherwise, Hawes warns, carmakers will soon be forced to take tough - and potentially irreversible - decisions. | Otherwise, Hawes warns, carmakers will soon be forced to take tough - and potentially irreversible - decisions. |
| He says: | He says: |
| “Some investment decisions are overdue … we need clarity [on the terms of a transitional period] by the end of the first quarter.” | “Some investment decisions are overdue … we need clarity [on the terms of a transitional period] by the end of the first quarter.” |
| [Otherwise] They will have to start implementing contingency plans.” | [Otherwise] They will have to start implementing contingency plans.” |
| Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business. | Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business. |
| With stock markets at record levels, investors will be looking to today’s US unemployment report for reasons to keep optimistic, and keep buying assets. | With stock markets at record levels, investors will be looking to today’s US unemployment report for reasons to keep optimistic, and keep buying assets. |
| The monthly non-farm payroll report is expected to show that America’s economy continued to create jobs in December. | The monthly non-farm payroll report is expected to show that America’s economy continued to create jobs in December. |
| The Wall Street consensus is that around 190,000 new workers were hired across the US last month, down from 228,000 in November. But it’s possible that the NFP could be stronger. | The Wall Street consensus is that around 190,000 new workers were hired across the US last month, down from 228,000 in November. But it’s possible that the NFP could be stronger. |
| The figures will probably also show that America’s unemployment rate remained at just 4.1%. But economists will be hoping to see evidence that employees are being paid more. | The figures will probably also show that America’s unemployment rate remained at just 4.1%. But economists will be hoping to see evidence that employees are being paid more. |
| David Madden of CMC Markets explains: | David Madden of CMC Markets explains: |
| On a month-on-month basis average earnings are tipped to increase by 0.3% and on an annual basis they are forecasted to rise by 2.5%. | On a month-on-month basis average earnings are tipped to increase by 0.3% and on an annual basis they are forecasted to rise by 2.5%. |
| The US has been steadily creating new jobs over the past few years, but wage growth has been sluggish. If the US economy wants to step up a gear in terms of economic growth, wage growth and in turn the spending levels will need to tick up. | The US has been steadily creating new jobs over the past few years, but wage growth has been sluggish. If the US economy wants to step up a gear in terms of economic growth, wage growth and in turn the spending levels will need to tick up. |
| Also coming up today. | Also coming up today. |
| European stock markets are expected to open mixed, after Thursday’s strong session drove the UK FTSE 100 to a new alltime high. | European stock markets are expected to open mixed, after Thursday’s strong session drove the UK FTSE 100 to a new alltime high. |
| European opening calls update courtesy of CMC MARKETS at 6.37am -FTSE 100 is expected to open 4 points lower at 7691. DAX is expected to open 23 points higher at 13190. CAC 40 is expected to open 2 points higher at 5415. | European opening calls update courtesy of CMC MARKETS at 6.37am -FTSE 100 is expected to open 4 points lower at 7691. DAX is expected to open 23 points higher at 13190. CAC 40 is expected to open 2 points higher at 5415. |
| Last night the US Dow Jones closed over 25,000 points for the first time ever, on hopes that the world economy will remain upbeat this year. | Last night the US Dow Jones closed over 25,000 points for the first time ever, on hopes that the world economy will remain upbeat this year. |
| Friday’s Daily Mail City: Wall St rally lifts global markets to record highs #tomorrowspaperstoday pic.twitter.com/KHomaerwk1 | Friday’s Daily Mail City: Wall St rally lifts global markets to record highs #tomorrowspaperstoday pic.twitter.com/KHomaerwk1 |
| Traders will also be watching out for the latest eurozone inflation figures, and new UK car sales figures (of which more in a moment....) | Traders will also be watching out for the latest eurozone inflation figures, and new UK car sales figures (of which more in a moment....) |
| The agenda | The agenda |
| 9am GMT: UK car sales figures for December | 9am GMT: UK car sales figures for December |
| 10am GMT: Eurozone flash inflation figures for December | 10am GMT: Eurozone flash inflation figures for December |
| 1.30pm GMT: US non-farm payroll unemployment report | 1.30pm GMT: US non-farm payroll unemployment report |
| 3pm GMT: US factory orders | 3pm GMT: US factory orders |