UK car sales tumble by 12%; FTSE 100 hits a new closing high – as it happened

Britain’s auto industry has suffered its second double-digit sales fall this year, with diesel sales slumping by nearly a third


And finally, here’s a neat graphic summing up today’s UK car sales figures:

UK's drop of October was driven mostly by the fleet consumers and diesel cars. Consumers are afraid of buying diesel #UK #SMMT #carsales

Brent crude has now hit a 28-month high, at almost $64 per barrel, as the shockwaves from the Saudi ‘corruption crackdown’ ripple through the oil market.

The purge of Saudi princes and officials has sparked speculation that instability in Saudi Arabia could affect oil supplies in the future.

“The geopolitical supply risk premium is starting to bear its head in the market right now because OPEC supply cuts have made it relevant.”

Brent Crude is at a 28-month high.

The drop in UK car sales didn’t deter City traders from pushing the Footsie to tonight’s closing high.

Energy firms rose, tracking the oil price after Brent crude hit that two-year high this morning.

Arguably, the UK index should have done better given the showing from its commodity stocks. BP and Shell jumped 0.8% and 1% respectively as Brent Crude crossed $62.50 for the first time in 2 years following an ‘anti-corruption’ blitz from Saudi Prince Mohammed bin Salman, with investors barrelling into the commodity as they weighed up the potentially destabilising effect this will have on the country’s oil output.

Copper also got a boost this Monday, surging 1.2% as the markets got to grips with the idea that the metal will see a sharp increase in demand as electric vehicles becomoe more popular. This in turn led the UK’s miners higher, with Riot Tinto up 1.7%, Anglo American up 2% and BHP Billiton up 2.7%.

After a quiet trading session, the UK’s FTSE 100 index has nudged up to a new all-time closing high.

The blue-chip index gained just two points today, having also hit a closing high on Friday.

FTSE 100 edges to a record high for the second consecutive session, up 1.93 points to 7,562.28 points

FTSE 100 and FTSE Local UK near post-EU referendum lows in common currency terms, relative to global stocks (FTSE All-World).

Here’s our news story on the latest drop in UK car sales, for those just tuning in:

New car sales have declined for the seventh month in a row, falling more than 12% in October as worsening confidence among consumers and businesses continues to dampen the market.

The figures show that the car market is on course for its first annual decline since 2011 and will continue to fall next year before stabilising in 2019, according to the Society of Motor Manufacturers and Traders (SMMT).

Related: Slump in UK car sales deepens as industry records 12% fall

Labour MP Chuka Umunna MP has warned that the drop in UK car sales shows that Brexit is hurting the economy.

He says:

“This is yet more evidence that the Brexit squeeze is already hitting working people and businesses alike.

“The rise in inflation – directly caused by the Brexit vote – has forced up prices and interest rates, deterring people from buying big-ticket items like cars.

The US stock market has opened for trading after a silence for the victims of yesterday’s Texas church shooting

..… and the Nasdaq index has hit yet another record high.

The NYSE and Nasdaq observe a moment of silence for the victims of the Texas shooting, the deadliest church shooting in U.S. history.

After hitting a two-year high this morning, Brent crude still up – and trading at $62.30 per barrel.

Kathleen Brooks of City Index says the shake-up and crackdown in Saudi Arabia is the ‘key driver’ behind Brent’s rally.

Last week the Saudi Arabian oil minister said that he supported another Opec production cut, set to be announced when Opec next meets later this month. This weekend an anti-corruption drive by Prime Mohammad bin Salman has seen the arrest of the well-known champion of capitalism Prime Alwaleed bin Talal among other officials and has rattled investors, stock exchanges across the Middle East have fallen at the start of this week. However, this hasn’t hurt the oil price as yet.

The reason that Brent has rallied even when other Saudi-based assets have struggled, could be two-fold: the extension of the Opec production cut is a powerful driver of oil in the short term, and Brent could be acting as a safe haven in the midst of the confusion around the anti-corruption drive and Prime Mohammad bin Salman’s shifting economic agenda.

Related: Oil price rises to two-year high after Saudi Arabia purge

Most European stock markets have lost a little ground today, as this chart shows:

European equity markets are slightly in the red as traders lock in their profits from last week’s broadly positive move.

The DAX and the CAC 40 saw fresh record highs last week, while the FTSE 100 hit a multi-month high, so a small pullback today is hardly surprising.

Over in America, the New York Federal Reserve has confirmed that its president, William Dudley, is retiring early next year.

That means more upheaval at the US Federal Reserve, just a few days after Donald Trump announced that Jerome Powell will succeed Janet Yellen as Fed chair next year.

NY Fed cofirms president-CEO Dudley to retire in mid-2018 before Jan 2019 term ends. Another vacancy on the board…

The drop in the value of the pound since the 2016 EU referendum is an important factor in Britain’s falling car sales.

So argues Ana Nicholls, Automotive Analyst at the Economist Intelligence Unit:

It’s not just a question of drooping consumer confidence – the economics of the car market have also changed in the past few months. With the pound so low, carmakers can no longer afford to use the kind of discounting and offers they have been using to keep the market buoyant.

The diesel market, meanwhile, has been hit by the threat of regulation and higher levies in the wake of the emissions scandal.

The Bank of England’s decision to raise interest rates won’t help the market, either, given that 86% of all cars are bought on credit – many of them on personal contract plans. Total car loans now stand at nearly £60bn. Although credit will remain cheap in historic terms, lenders will be forced to pass on the interest rate rise sooner or later.

Sales of vans in the UK have also fallen sharply, mirroring the slump in car sales last month.

The SMMT reports that light commercial vehicle sales fell by 7.4% last month; another sign that British businesses are suffering a drop in confidence.

Newsflash from America: Semiconductor manufacturer Broadcom has launched a $130bn takeover bid to take control of smartphone chipmaker Qualcomm.

Labour leader Jeremy Corbyn is now addressing the CBI’s annual conference.

On Brexit, he says the UK needs to agree a transition deal soon.

Corbyn speaking now at #CBI2017 – "to delay a transition deal until a final deal is agreed is simply not good enough."

Related: May says media have not revealed full extent of Westminster sexual misconduct scandal – Politics live

The chief executive of BT, Gavin Patterson, has warned the government that it only has a couple of months to agree a transitional Brexit deal, before firms start to vote with their feet.

Patterson says companies will start enacting their “worst case scenario” Brexit plans from the start of next year, when the value of a transitional deal to leave the EU begins to “deteriorate” for firms.

“[Clarity on transitional arrangements] That’s very urgent at this moment. If we don’t we’ll all start planning and implementing a hard Brexit scenario which is not going to be very good.”

“The beginning of next calendar year it’s going to begin to deteriorate in value.

Ultimately the planning horizon, of most businesses I certainly talk to, is the order of a year to 18 months. If you don’t have certainty at that point you have to start planning for a worst case scenario.”

The CEO of BT, Gavin Patterson, says "worst case scenario" Brexit plans will begin to be put in place by firms from start of 2018

Over in the City, shares in car dealership Inchcape have fallen by 2.7% this morning, to the lowest level since mid-July.

Traders seem to be reacting to this morning’s weak UK car sales figures, say analysts at MorningStar:

Listed car dealers react to weak sales data: FTSE 250 share Inchcape $INCH falls, as does Motorpoint $MOTR

Simon Benson of AA Cars says the government’s crackdown on older ‘dirty diesel’ cars is having a major impact – with sales down 30% year on year in October.

Benson says:

“Despite registrations of alternatively fuelled vehicles rising and a slight uplift in sales of petrol cars, the overall market was down by more than 12% last month as these efforts failed to balance out diesel’s sharp decline.

“With the widespread uncertainty and general confusion surrounding diesels and the potential for charges and restrictions in London and other major cities, a distinct lack of buyer confidence is the primary reason for this dramatic drop.

Back in the eurozone, optimism among investors has hit its highest level in a decade.

That’s according to Sentix, the research group. It’s eurozone investor confidence gauge soared to 34 this month, up from 29.7 in October .

#Eurozone : Sentix Investor Confidence came in at 34, above forecasts (30.8) in November. #Economy #Europe #EURUSD @coe @business @c_lindner

Economist Danny Blanchflower reckons the decline in UK car sales shows that the Bank of England was wrong to raise UK interest rates last week.

Strong pmi data from Germany France and Italy ecb did not raise rates terrible data on car sales in UK where mpc raised rates duh

Alex Buttle of car buying comparison website isn’t surprised that diesel car sales have slumped by 30% year-on-year.

He blames the emissions scandal, in which manufacturers used ‘cheat software’ to hide how much pollution they were creating. With Paris planning to ban diesels by 2024, consumers seem to be voting with their wallets.

“These figures make depressing reading for the car industry. Petrol and alternative fuel figures were actually up in October, but diesel sales continue to flounder.

“Diesel’s market share is plummeting and consumers aren’t listening to rhetoric about cleaner diesel models, however much the industry drums on about it. The damage has been done.

The outlook for UK car sales looks “bleak”, warns Samuel Tombs of Pantheon Economics.

He says that the 12.2% slump in October is “alarming”, and shows that consumers are very reluctant to make financial commitments at present.

Worryingly, sales are falling rapidly even though generous discounts are available for buyers trading in old, high-polluting diesel vehicles. Most manufacturers’ diesel scrappage schemes are set to close at the end of this year. The recent further decline in consumer confidence, meanwhile, indicates that car registrations will continue to fall well into 2018.

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

UK private car registrations down 10.1% y/y in October. This downward trend has further to run:

This chart highlights how sharply UK car sales have declined this year:

U.K. car registrations in the last six months, compared to the same six-month period last year.

Tony Burke, assistant general secretary at the Unite union, blames the ‘chaos’ around Britain’s exit from the European Union:

New car sales fall again. Gvt must listen to unions & manufacturers. Brexit chaos damaging our great auto industry.

The fall in UK car sales has accelerated over the last three months, making October’s year-on-year decline the biggest since April:

Although diesel sales slumped, Britons actually bought more electric cars in October.

Sales of alternatively fuelled vehicles rose by 36.9% year-on-year, with 8,244 new models registered during the month.

It’s official! UK car sales declined by 12.2% in October, as the slowdown in Britain’s auto industry continues.

The Society for Motor Manufacturers and Traders blames “falling confidence among buyers”, as the slump that began in April continues.

“Declining business and consumer confidence is undoubtedly affecting demand in the new car market but this is being compounded by confusion over government policy on diesel. Consumers need urgent reassurance that the latest, low emission diesel cars on sale will not face any bans, charges or other restrictions, anywhere in the UK.

We urge the Government to use the forthcoming Autumn Budget to restore stability to the market, encouraging the purchase of the latest low emission vehicles as fleet renewal is the fastest and most effective way of addressing air quality concerns.”

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We also have strong economic data from France.

The French private sector grew at its fastest pace in over six years in October, according to data firm Markit’s monthly healthcheck.

#France Markit Composite PMI Final at 57.4

#Germany Markit Composite PMI Final at 56.6


The oil price has hit a two-year high this morning.

Brent crude is changing hands at $62.50 per barrel, up 0.7%, which may lead to higher fuel and energy prices this winter.

Related: Saudi king sacks top ministers and gives more power to crown prince

“As one of the world’s largest producers and exporters undergoes a transformation of its economy, some uncertainty and political risk is bound to be encountered along the way, which would be supportive for prices.”

Oil trades over $56 as Saudi purge bolsters pro-OPEC cut crown prince

Over in Europe, Germany’s manufacturing sector has beaten expectations again.

German economic summer explosion continues. New orders continue their August surge and increase again in September.

Super strong rebound in German orders over the past two months, including demand from other € countries. Self-sustained #euroboom.

Today’s car sales figures come at a nervous time for the auto industry.

Last month, car dealership chain Pendragon shocked the City with an unexpected profits warning which sent its shares careering to a four-year low.

Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.

British new car sales in October fell by about 12 percent year on year, marking a seventh consecutive month of decline, preliminary data released by an industry body showed on Monday.

Sales were hurt by a decline in business and consumer confidence, the Society of Motor Manufacturers and Traders(SMMT) said.

Here are the bestselling cars for September and the year-to-date. Octobers figures are out on Monday

European Opening Calls:#FTSE 7547 -0.17%#DAX 13468 -0.08%#CAC 5510 -0.14%#MIB 22983 -0.13%#IBEX 10345 -0.13%

Related: May and Corbyn to set out competing views of Brexit negotiations

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