Interest rates ‘must fall for car sales to rise’

The increased number of new cars being sold will continue only if interest rates start to fall, it has been claimed.

According to the Retail Motor Industry Federation, there were more 2.4 million vehicles snapped up by consumers in the UK over 2007 – a 2.5 per cent rise compared to figures from 2006.

But Sue Robinson, director of the group, believes the trend will only continue if interest rates and current household costs go down.

She commented that although "consumer confidence weathered the economic storms", it is up to the government and the Bank of England to maintain it.

"Interest rates must come down in 2008 for this level of demand to continue … Current rising household costs will have an impact on other major purchases," said Mrs Robinson.

The Retail Motor Industry Federation is the trade body for the sector and is made up of a number of smaller automotive groups.


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