New car registrations fell 5.1% year on year in March while private car sales were down more than double that, Reuters reported.
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The Society for Motor Manufacturers reportedly said private registrations fell 10.6% year on year in a market where they account for only around half of sales, because company cars are a coveted perk for senior employees.
“It seems that high interest rates have hurt consumer spending power,” James Carrick, an economist at ABN AMRO, told Reuters, adding: “The report should tell the Bank of England that the consumer is feeling the pinch of higher interest rates”
The news agency noted that the BoE has raised borrowing costs five times in the last 1-1/2 years and while no change is expected when policymakers finish their monthly meeting on Thursday, the jury is out over whether rates will rise again in the next few months.
Overall car sales were down 7.2% in the first quarter on a year ago while private car sales were down 14.4%, Reuters said.
But the SMMT reportedly said the latest decline came from a very high base and the 442,940 cars sold last month were still the second highest on record for March.
