Good morning and welcome to our moving coverage of business, the economy and the financial markets.
The shortage of semiconductors and the cost of living hit car sales in the UK last month, although more and more motorists are turning to electric vehicles.
UK new car registrations fell about 14% in March from a year earlier, despite lifting restrictions on Covid-19 last month, according to preliminary industry figures released this morning.
This will result in less than 250,000 registrations, much less than the average of 450,000 in March of the decade before the pandemic.
March is usually the biggest month for the automotive sector because the “new” registration numbers are coming. But the pressure on household finances will mean that some families will delay getting a shiny new car as rising food, fuel and energy costs eat up budgets.
The shortage of chips continues to hit the sector as supply chains continue to struggle after a two-year break in the pandemic. Car production in the UK fell 41% year on year in February, according to data from last month.
In addition to struggling to supply chips, manufacturers have also been hit by rising metal costs as the war in Ukraine pushes sharply higher commodity prices.
Car sales in the UK rose on an annual basis in January and February (compared to weak sales in 2021, when the pandemic hit the sector), so the decline in March reversed this trend.
However, EV vehicles are in growing demand as motorists avoid diesel.
Today’s report is expected to show that March was the best month for battery electric vehicle sales, with registrations last month surpassing those for 2019.
Gary Robertson (@BBCGaryR)
Electric car sales are up today from @SMMT, which is expected to show the number of UK front yard vacancies last month ahead of 2019-wide sales, but the total number of new registrations is still close to pre-existing levels pandemic # bbcgms 0655
April 5, 2022
SMMT will publish the final figures for March at 9 am.
Also coming today
The latest PMI research will show how companies in the UK, eurozone and US last month have faced rising energy and raw material prices and the ongoing pandemic.
Oil prices are rising as the United States and France call for a significant escalation of sanctions against Russia following the shocking discovery of hundreds of civilian bodies in cities around Kyiv. Brent oil rose 1.5 percent this morning to about $ 109.
The agenda
- 9 a.m. BST: Car sales in the UK for March
- 9 am BST: PMI services sector PMI for March (final reading)
- 9.30 am BST: UK PMI for March (final reading)
- 13.30 BST: US Trade Report for February
- 15:00 GMT: US PMI for March (final reading)
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