New car registrations are set to fall 5.5% in 2018, making the UK the worst performing economy of the major European nations, according to BBC News.
Spain, Italy, Germany and France are all predicted to see increased registrations but ratings agency Moody’s said the fall in the value of the pound following the EU referendum had impacted the affordability of imported cars.
Moody’s said Brexit is “weighing on consumer spending decisions.”
UK industry body SMMT said there were 2.7m new car registrations in the UK in 2016, the highest figure on record and a fifth successive year of growth year-on-year. However, in 2017 the figure fell 5.7% as purchasers started to avoid diesel cars and avoid large expenditure items.
Moody’s forecasts indicate that there will be 2.4m new car registrations in the UK in 2018, equivalent to a 10% drop in two years. A similar number of new registrations is expected for 2019.
Moody’s managing director of manufacturing Matthias Hellstern said: “The UK market will be the worst performer compared to all the other major economies in Europe, and, even worse, the only one that is declining.”
However, there is some evidence that the UK economy is performing better than expected. In March, the Office for Budgetary Responsibility revised its growth forecast up from 1.4% to 1.5% and said inflation was likely to fall to 2% by the end of the year, meeting the Bank of England’s target level.