LONDON -- New car registrations in Britain fell 4.6 percent year-on-year in July, the Society of Motor Manufacturers and Traders said on Thursday, suggesting recent interest rate hikes may be cooling consumer spending.
The Bank of England raised interest rates 25 basis points to 4.75 percent on Thursday to keep a lid on inflation which has been buoyed by strong consumer demand. It was the Bank's fifth 25 bps hike since November.
However, the SMMT said it was still optimistic of strong sales this year.
"Record registrations in July 2003 set a challenging target for this month, but we expect consumers to remain confident and deliver another strong year for new car registrations," said SMMT Chief Executive Christopher Macgowan.
The SMMT reported a total of 187,632 new registrations in July.
Large fleet and business sectors continued to bolster the market, while the Ford Focus was the bestselling car in the UK in July, and in the year to date, the SMMT said.