The chief executive of the UK’s Retail Motor Industry Federation (RMI) has welcomed the decision early on Thursday by the Bank of England’s Monetary Policy Committee to reduce its base interest rate 0.25% to 4.5%.
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“The quarter percent reduction in the interest rate is a move in the right direction, as it will help kick-start the consumer economy, which has been struggling during recent months,” said RMI’s Matthew Carrington.
Carrington believes this will encourage consumer spending.
“Over the last few years consumers have been purchasing new vehicles at record rates, partly as a result of the increasing value of their homes, and greater disposable income.
‘Recently, however, there have been signs that consumers are being more cautious in committing to large purchases – including vehicles – as a result of the cost of borrowing and the slow-down in the housing market.”
He added: “The rate drop should have a positive impact on new car sales during September, giving a boost to the upcoming ‘55 plate’.”
UK new vehicle registration plates change twice yearly on 1 March and 1 September. Each changeover period there is a significant increase in sales as buyers rush to secure vehicles with a ‘new plate’.
