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It’s general election day in the UK. Voting has now begun and polling stations will be open until 10pm. Polling suggests it could bring an end to 14 years of the Conservative party in government, and lead to Labour opposition leader Keir Starmer being installed in Downing Street as the new prime minister. You can read more on our main election blog here:
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New car sales in the UK grew by 5% year on year in June, according to preliminary data from the industry body, the Society of Motor Manufacturers & Traders.
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It means that the number of new cars leaving forecourts has exceeded 1m in the first half of the year, the first time since 2019 it has passed that milestone.
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Mike Hawes, the SMMT’s chief executive, said on BBC radio 4’s Today programme:
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It’s kind of a relief to get there. We know we’re clearly heading for around 2m new car sales this year, which is a bit below par. But obviously things are changing in terms of the number of vehicles potentially being bought. But to get there, given all the difficulties we’ve had over the last five years and indeed beyond that, it’s a real boost for the industry.
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It’s almost entirely business and fleet sales. There’s a number of reasons behind that. Obviously the backdrop of the economic conditions isn’t great, and households are on a squeeze. And most people, private buyers, tend to buy through finance with inflation high and interest rates high, it’s made the cost of purchase more expensive.
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But the carrot has been for the businesses, the incentives, the company car tax that is there for the fleet and the business buyer, has stimulated demand, especially for electrified vehicles. So that’s what’s really driving the growth.
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The market share of pure battery electric new cars remained on a par with last year, at around 16-17%. Final figures for June will be published by the SMMT at 9am.
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In Germany, factory orders fell unexpectedly in May, declining by 1.6% on the previous month. Economists had expected a rise of 0.5%.
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The minutes of the US Federal Reserve’s June meeting showed that policymakers acknowledged the US economy appeared to be slowing and that “price pressures were diminishing”. But they still opted for a wait-and-see approach before committing to interest rate cuts, according to minutes of the 11-12 June session.
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The minutes, which were released last night, noted a weak May reading in the consumer price index as one among “a number of developments in the product and labor markets” that supported a view that inflation was falling.
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Wage growth had slowed, some officials noted, while others pointed to price cutting among major retailers and reports from their own business contacts that “pricing power had declined.”
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However, policymakers concluded that more time and data was needed before they could decide on a rate cut.
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Officials “did not expect that it would be appropriate to lower the target range for the federal funds rate until additional information had emerged to give them greater confidence that inflation was moving sustainably toward” the 2% target, the minutes said.
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The Agenda
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9am BST: UK SMMT new car sales for June
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8.30am BST: Eurozone, France, Germany, Italy construction PMIs for June
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9.30am BST: UK S&P Global construction PMI for June
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12.30pm BST: ECB monetary policy meeting accounts
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Important Events
SMMT chief executive Mike Hawes was asked earlier how demand for electric cars was holding up.
“It’s OK,” he said, but added that it will be a long and difficult road before electric vehicles hit the mass market.
June was okay, but what we’ve seen is that we’ve hit a kind of plateau. When these cars first came on the market, the demand was very high because they were early adopters. We need to move it from the early adopter stage to the mass market. It’s never smooth sailing. So manufacturers are doing everything they can to stimulate that demand with very attractive deals. But there are still challenges ahead, given the state of the economy and the fact that these cars are still more expensive than their older petrol and diesel counterparts.
Introduction: UK new car sales top one million in first half of year for first time since 2019
Good morning and welcome to our continuing coverage of business, financial markets and the global economy.
It’s general election day in the UK. Voting has already begun, with polling stations remaining open until 10pm. Opinion polls suggest this could bring an end to 14 years of Conservative rule and see opposition Labour leader Keir Starmer take over Downing Street as the new prime minister. Check out our main election blog for more details.
UK new car sales rose 5% year-on-year in June. That’s according to preliminary data from industry group the Society of British Automotive Manufacturers and Manufacturers.
This means that new car sales exceeded one million units in the first half of the year, the first time this figure has been exceeded since 2019.
Mike HawesThe SMMT chief executive told BBC Radio 4’s Today programme:
It’s a relief to get there. We’re obviously approaching around 2 million new car sales this year, which is a little bit lower than the norm. But obviously things have changed in terms of the number of cars that could be bought. But it’s a really big boost for the industry to get there, given all the challenges that we’ve been through over the last five years and even since then.
Most are corporate and fleet sales. There are a few reasons behind this: obviously the economy is not great, household budgets are tight, and most private buyers tend to buy through loans amid high inflation and interest rates, making the cost of purchase higher.
But for businesses, incentives – company car tax for fleets and corporate buyers – have stimulated demand, especially for electric vehicles. That’s what’s driving the growth.
The market share of new pure battery electric vehicles remained at 16-17%, roughly the same as last year. Final figures for June are due to be published by the SMMT at 9am.
German factory orders unexpectedly fall in MayThat was a 1.6% decrease from the previous month. Economists had expected a 0.5% increase.
of Minutes from the Federal Reserve’s June meeting Policymakers indicated they recognized the U.S. economy appears to be slowing and that “price pressures are fading,” but they still opted to wait and see before cutting rates, according to minutes from their June 11-12 meeting.
The minutes, released last night, pointed to weakness in May’s consumer price index as one of “several developments in commodity and labor markets” that support the view that inflation is falling.
Some officials noted slowing wage growth, while others pointed to price cuts by major retailers and reports from their own suppliers of “less pricing power.”
However, policymakers concluded they needed more time and data before deciding to cut rates.
According to the minutes, officials “did not consider it appropriate to lower the target range for the federal funds rate until there was additional information that increased confidence that inflation was moving sustainably toward the 2 percent objective.”
agenda
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9am UK time: UK SMMT new car sales in June
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8.30am BST: Eurozone, French, German and Italian construction PMIs for June
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9.30am BST: UK S&P Global Construction PMI June
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12.30pm BST: ECB Monetary Policy Meeting Report
