Car sales up, interest rates up – something’s got to give

‘Car buyers have weathered 2007’s multiple interest rate rises very well, if June’s car sales figures are anything to go by, but consumer confidence can only take so much,’ said Sue Robinson, Director of the RMI National Franchised Dealers Association (NFDA), part of the Retail Motor Industry Federation (RMIF), commenting on car sales figures for June 2007, and the interest rate rise announced today (5 July 2007).

222,863 new cars were sold during June, 1.5 per cent down on 2006.

Year to date sales are 1,267,299, up 2 per cent.

The Bank of England also announced that interest rates would be increased by 0.25 per cent to 5.75 per cent.

Robinson believes that consumer confidence could take a knock due to the rate increase: ‘The inexorable upward curve of interest rates may give consumers pause, and that could have a negative impact on the overall economy.’

Robinson adds: ‘Despite the good news on sales, interest rates should go up no further for the time being, in order to allow for market stabilization.’