Economic & Market Overview

The macro-economic challenges in the UK continue to feed the news headlines on a daily basis and the automotive sector has certainly not been immune.

John Hughes Managing Director 

While, naturally, it is Brexit and the impact upon consumer and business finance that is dominating news headlines, motor retailing in the UK is facing some unique challenges of its own. At the top of this list are environmental changes.

From September 1st 2018, all new cars sold in the UK had to comply with the new ‘Worldwide Harmonised Light Vehicle Test Procedure’ (WLTP), a tougher ‘real-world’ assessment of fuel consumption and CO2 emissions from passenger cars, as well as their pollutant emissions. With all too many manufacturers struggling to meet the new standards, the result was a shortage of new car stock. Add to this confusion on the impact of WLTP on Benefit in Kind tax for company car drivers and an already slowing new car market slowed even further, notably in the fleet sector. Last year, new car sales fell by 12.7% since the highpoint of 2016, when 2.7 million units were registered.

This year, the environment will continue to be a key influencing factor. On April 8th, London will introduce the first phase of its Ultra-Low Emission Zone. This will see the drivers of the worst polluting vehicles paying a daily fee of £12.50 to use London’s roads. Other major conurbations across the UK are expected to introduce similar schemes.

Against this backdrop, dealers have switched their focus to used vehicles and by leveraging the power of finance, many of the major groups across the UK have been reporting impressive financial results. It all goes to show just how important finance is to the motor retail industry.

There can be no question that 2019 will be a year of challenge for motor retailers and the lesson from last year can remain true; people will again be buying cars and the retailers who use finance to demonstrate affordability are likely to be winners. In this challenging market, agility will be all-important and as a lender with broker capability, our unique proposition proves that agility is something we understand.

Call us on 0370 600 6668 – we are ready to help when you need us.

Economic Data Summary as at 11/02/19
CPI (January) +1.8% Lowest level in two years
CPIH (January) +1.8% Lowest level in two years
Employment Rate (September ’18 to November ’18) 75.8% Higher than for a year earlier (75.3%) and the highest since comparable estimates began in 1971.
Unemployment Rate September ’18 to November ’18) 4.0% It has not been lower since December 1974 to February 1975.
GDP Growth/Shrinkage Q4 2018 +0.2% The UK economy expanded at its slowest annual rate in six years in 2018.
BoE Base Rate 0.75%  
LIBOR (6M GBP) 1.00650  
Crude Oil $52.72  
Gold $1,314.14  

Sources: Bank of England, ONS,,;

Personal Loan Rates

Please note the following unsecured personal loan rates were sourced from lenders’ websites on 01/02/2019 – Based upon a £5000 loan over 36 months and subject to underwriting. These advertised rates should apply to 51% of all customer accepted for a loan on the advertised terms & conditions. Note some rates may only be available to current customers.

Lenders £5K Representative APR Lenders £5K Representative APR
Sainsbury’s Finance 4.4% Halifax 9.9%
Tesco Personal Finance 3.7% HSBC 6.1%
Santander UK 4.5% Lloyds Bank 14.5%
Nat West/RBS 7.9% TSB Bank 9.9%
M &S 3.6% Barclays Bank 10.5%

SMMT outlook for 2019 and 2020 – as at January 28th 2019


  • Cars registrations at 2.313m, down 2.3% on the 2018 level.
  • Diesel car volume of 0.624m, down 16.9% on 2018 and reducing market share to 27.0%.
  • AFVs registrations to rise 25.3% and plug-ins up 43.0%, taking market shares to 7.7% and 3.7%
  • LCV registrations at 0.345m, down 3.4% on the 2018 level.


  • Cars registrations at 2.290m, down 1.0% on the 2019 outlook level.
  • Diesel car volume of 0.531m, down 14.8% on 2019 outlook and cutting market share to 23.2%.
  • AFVs registrations to rise 31.1% and plug-ins 36.0%, pushing market shares to 10.1% and 5.1%
  • LCV registrations at 0.334m, down 3.3% on the outlook for 2019.

Notes: car forecasts rounded to nearest 10,000 and LCV to 1,000 unit.
Reasonable care has been taken in preparing this information. It is not an exclusive aid for market analysis, other sources and market intelligence should be reviewed.

National House Price Index (published by Halifax as of 7th February 2019)
Annual Change +0.8%
Quarterly Change -0.6%
Monthly change -2.9%
Average Price £223,691

House Price News (source Halifax Banking Group as at (07/02/19)

  • Monthly UK home sales latest quarter. December saw 102,330 home sales, which is very close to the 5 year average of 101,515. This is the fourth consecutive month where over 100,000 homes have been sold, and there is a 2.7% quarterly rise when comparing sales in October to December, against July to October. December home sales were 3.2% above the previous 12 month average. (Source: HMRC, seasonally-adjusted figures)
  • In December, mortgage approvals showed little difference to the previous month. Bank of England industry-wide figures show that the number of mortgages approved to finance house purchases – a leading indicator of completed house sales – saw a flat 0.2% rise to 63,793. The December rate is still not far below the 2018 average of 64,913 but is 2,694 below the average of the past 5 years. (Source: Bank of England, seasonally-adjusted figures)
  • Demand for housing and the number of sales both fall. As in November, the December 2018 RICS UK Residential Market Survey showed a drop on nearly every measure reviewed. New buyer enquiries fell for a fifth month, stock levels of property to sell remains low at an average of 42 per branch. Near-term sales expectations are now either flat or negative across all parts of the UK, though at present the sales expectation for the twelve month outlook are positive for the first time since May 2018. (Source: Royal Institution of Chartered Surveyors’ (RICS) monthly report)

Household Finance Update December 2018 – UK Finance

  • Estimated gross mortgage lending for the total market in June is £23.5bn, 2.1 per cent higher than a year earlier.
  • The number of mortgage approvals by the main high street banks in June fell by 2.1 per cent compared to the same month a year earlier. Within this, only remortgaging approvals increased and were 3.4 per cent higher than for the same period a year earlier, this was offset by the 4.7 per cent fall in house purchase approvals and 4.3 per cent fall in other secured borrowing.
  • Credit card spending was 4.7 per cent higher than a year earlier, with outstanding levels of card borrowing having grown by 5.6 per cent over the year. Outstanding overdraft borrowing was 5.8 per cent lower compared to the same time last year.
  • Personal deposits grew by 1.3 per cent in the last 12 months. Deposits held in instant access accounts were 4.2 per cent higher than a year earlier.

Financial News

Household Finance – December – UK Finance

  • The £11.0bn of credit card spending in December 2018 was 8.8 per cent higher than the same month the previous year. The outstanding level of credit card borrowing grew by 4.7 per cent in the twelve months to December. Personal borrowing through loans and overdrafts grew by 3.4 per cent in the year to December
  • The number of mortgages approved by the main high street banks in December 2018 was 2.4 per cent lower than the same month the previous year; approvals for home purchase were 5.3 per cent higher; re-mortgage approvals were 5.8 per cent lower; and approvals for other secured borrowing were 18.9 per cent lower.

SME Business Finance – Q3 2018 – UK Finance

  • There were 69,980 new loans and overdrafts approved for a value of £7.0bn in Q3 2018
  • Banks approved eight out of ten applications for SME Finance
  • Cash held in both immediate and notice accessible SME accounts continues to rise

Source: UK Finance

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