UK car sales jump 26% as supply chain problems ease; another City firm eyes New York listing – business live

UK car market grows for seventh month running

It’s official: UK new car registrations grew by 26.2% year-on-year in February as 74,441 new cars joined Britain’s roads.

That’s according to the latest figures from the Society of Motor Manufacturers and Traders (SMMT), just released, which shows last month was the busiest February for car sales since 2020.

This is the seventh month of consecutive growth, as the easing of supply chain shortages help the car market to recover.

Deliveries to private buyers up 5.8%, while purchases by large fleets jumped 46.2%. Business registrations rose by a mere 0.7%, or just nine cars.

The SMMT reports that hybrid electric vehicles (HEVs) recorded the most significant growth of all fuel types, up 40.0%. HEVs have a fossil fuel engine, which can charge an electric battery which can drive an electric drivetrain.

Petrol sales were 35.8% higher than a year ago, while diesel registrations fell by -7.0%.

Battery electric vehicle (BEV) registrations were up 18.2%, and make up one in six new UK car registrations, while sales of plug-in hybrids (PHEVs) were 1.0% higher.

Photograph: SMMT

The SMMT are urging Jeremy Hunt to announce measures to support the electric car market in next week’s budget.

They say:

This should include a long-term plan for chargepoint investment, aligning VAT on public charging with domestic energy use, and reviewing the Vehicle Excise Duty premium that will unfairly penalise EV buyers switching to this inevitably more expensive technology in the future.

Key events

The return to growth in the UK construction sector last month will be welcomed by contractors who are hoping the worst of the economy’s storms have passed, says Max Jones, director in Lloyds Bank’s infrastructure and construction team.

Jones explains:

“Despite an uncertain economic picture, many in the industry feel confident. Payment times are proving resilient across supply chains, pipelines on infrastructure and commercial projects are holding up well and inflation, for materials and labour, looks to have passed its peak.

“The industry will be closely monitoring this month’s Budget. While few expect the Chancellor to pull any rabbits out of his hat, clarity around future projects, particularly in the regions, will give contractors the confidence they need to plan and invest in the future.”

UK construction sector rebounds in February despite weak housebuilding

Just in: the UK’s construction sector rebounded back into growth last month as fears of a recession fade.

The S&P Global/CIPS UK Construction Purchasing Managers’ Index (PMI), which tracks activity in the building sector, jumped to 54.6 in February, up from 48.4 in January.

That shows the fastest growth since May 2022, and well above expectations of a reading around 49.1. Anything over 50 shows a rise in activity.

There was a “robust increase” in overall business activity across the UK construction sector last month, S&P Global reports, after two months of decline.

The rate of growth was the strongest since May 2022, supported by a marked rebound in commercial work and a positive contribution from civil engineering activity.

But, activity in the house-building sector decreased for the third month running.

Many housebuilders have been cutting back following a drop in demand, as house prices fall.

Tim Moore, economics Director at S&P Global Market Intelligence, says that housebuilding was the ‘weak spot’ in the sector:

Some firms noted that fading recession fears and an improving global economic outlook had boosted client confidence in the commercial segment. At the same time, work on major infrastructure projects such as HS2 contributed to the expansion of civil engineering activity in February.

Cutbacks to new house building projects remained the weak spot for construction sector activity, with total residential work falling for the third month running in February. Survey respondents often commented on subdued demand and a headwind from elevated interest rates.

Construction companies appear increasingly confident about the year ahead business outlook, with optimism rebounding strongly from the lows seen in the final quarter of 2022. Softer inflationary pressures and the least widespread supplier delays for just over three years were factors supporting business expectations in February.”

A backlog of orders for new cars, which were held up by recent supply chain problems, helped boost registrations last month, says Chris Knight, UK automotive partner for KPMG:

“New car sales headed into March’s plate change month in a relatively healthy state, thanks to a strong order bank built up over previous months of short supply.

“Battery electric vehicles represented 16% of the new car market last year, but aside from uncertainty linked to the cost of living crisis - whether electric vehicle transition can continue to maintain momentum also depends on the pace of rollout of charging points and opening up the market to more consumers via the availability of lower cost new EVs.”

The jump in new car registrations last month comes as confidence grows across the sector, says Mike Hawes, chief executive of the SMMT:

After seven months of growth, it is no surprise that the UK automotive sector is facing the future with growing confidence. It is vital, however, that government takes every opportunity to back the market, which plays a significant role in Britain’s economy and net zero ambition.

As we move into ‘new plate month’ in March, with more of the latest high-tech cars available, the upcoming Budget must deliver measures that drive this transition, increasing affordability and ease of charging for all.

UK car market grows for seventh month running

It’s official: UK new car registrations grew by 26.2% year-on-year in February as 74,441 new cars joined Britain’s roads.

That’s according to the latest figures from the Society of Motor Manufacturers and Traders (SMMT), just released, which shows last month was the busiest February for car sales since 2020.

This is the seventh month of consecutive growth, as the easing of supply chain shortages help the car market to recover.

Deliveries to private buyers up 5.8%, while purchases by large fleets jumped 46.2%. Business registrations rose by a mere 0.7%, or just nine cars.

The SMMT reports that hybrid electric vehicles (HEVs) recorded the most significant growth of all fuel types, up 40.0%. HEVs have a fossil fuel engine, which can charge an electric battery which can drive an electric drivetrain.

Petrol sales were 35.8% higher than a year ago, while diesel registrations fell by -7.0%.

Battery electric vehicle (BEV) registrations were up 18.2%, and make up one in six new UK car registrations, while sales of plug-in hybrids (PHEVs) were 1.0% higher.

Photograph: SMMT

The SMMT are urging Jeremy Hunt to announce measures to support the electric car market in next week’s budget.

They say:

This should include a long-term plan for chargepoint investment, aligning VAT on public charging with domestic energy use, and reviewing the Vehicle Excise Duty premium that will unfairly penalise EV buyers switching to this inevitably more expensive technology in the future.

Mining shares drop on China's growth target

In the City, shares in mining giants are sliding after Beijing announced a surprisingly low growth target for this year.

Anglo American (-3.2%), Rio Tinto (-2.3%) and Antofagasta (-2.3%) are among the top fallers on the FTSE 100 this morning, following China’s decision to aim for an economic expansion of “around 5 per cent” for 2023.

The oil price has dipped a little too, as traders calculate that China’s reopening after Covid-19 restrictions will not provide as much growth as expected.

Neil Wilson of Markets.com explains:

Caution seemed the order of the day across markets early on Monday as China set itself one of the lowest gross domestic product target in many years, hinting to investors that the big reopening boom may not be as positive for the global economy as hoped.

Beijing set a target of around 5% growth this year, creating a relatively low bar for the regime to clear. Oil and other industrial commodities slipped on the news, whilst basic resources stocks in London were hit, dragging the FTSE 100 marginally into the red at the open.

Beijing’s target signals that policymakers are not planning any large-scale stimulus measures now, says Mark Haefele, chief investment officer at UBS Global Wealth Management.

Haefele explains that China is relying on a sharp rebound in consumption, and on investment, adding:

“Our positive outlook on China’s recovery prospects is a key driver for our global equity preference for emerging markets, while in our Asia strategy we rate China equities as most preferred.”

Eurozone construction activity shrinks for 10th month in a row

The eurozone’s construction sector shrank again in February, for the 10th month running.

The S&P Global Eurozone Construction Total Activity Index has risen to 47.6 in February from 46.1 in January – still below the 50-point mark showing stagnation.

The relative improvement in the headline index was supported by softer drops in both residential and civil engineering activity, S&P Global says.

The sector has been hit by rising interest rates since last summer, weak consumer confidence, and increased costs.

Home building dropped again across the eurozone last month, extending a decline that began last May. But more encouragingly, construction firms took on more staff, led by firms in France and Italy.

Annabel Fiddes, economics associate director at S&P Global Market Intelligence, said:

The latest PMI data showed that the eurozone construction sector moved closer to stabilisation in February, with firms signalling the softest reduction in overall activity for nine months.

This was underpinned by weaker falls in construction output across Germany and Italy, which offset a more marked decline in France. The downturn in new business also continued to ease, though sales still dropped considerably overall, which contributed to a sustained fall in purchasing activity.

Sir James Dyson warns Britain against tax grabs

Entrepreneur Sir James Dyson is urging the government not to lift taxes on businesses, claiming that a double tax grab will hurt the economy.

In a letter to Jeremy Hunt, seen by The Sun, Dyson warned the chancellor of the “unintended consequences” of hiking corporation tax and bringing in a new global levy on multinationals agreed by the OECD.

Dyson, who has criticised Rishi Sunak’s administration before, told Hunt that the Government has “done nothing but pile tax upon tax on to British companies.”

He reminds the chancellor that pharmaceuticals firm AstraZeneca recently chose to build a $360m advanced manufacturing factory in Ireland, not the UK, and cited ‘discouraging’ UK tax rates.

He writes:

“Is it any wonder that the economy is teetering on recession, or that companies like AstraZeneca are deciding to take their investment elsewhere?”

Dyson wants Hunt to drop plans to lift corporation tax from 19% to 25% in April. He argues that this, and the new Global Minimum Tax on multinationals, “will do nothing” to generate the recovery and growth we need.

In January, Dyson claimed that the “shortsighted” and “stupid” economic policies pursued by Sunak’s government have left the country in a state of “Covid inertia”, and that “growth has become a dirty word”.

Shell CEO: US is more attractive than Britain for energy investment

The boss of energy giant Shell has warned that America is significantly more attractive than Britain for energy investment

Shell’s new chief executive, Wael Sawan, has told The Times that that UK government should “take a page from some of the things that the US have done recently, through the Inflation Reduction Act”.

The IRA is a $369bn (£300bn) package of subsidies to spur green investment in America, which has spurred the European Union to push on with its own subsidy plans.

The UK, though, has claimed that the IRA package is protectionist, and has not yet responded with a similar package of its own.

Sawan says that the IRA provides “ten-year clarity and tangible, fixed incentives that people know to bank on”.

Instead, he warns, the UK’s focus on windfall taxes, planning delays and uncertainty over subsidies make Britain a less attractive market.

Asked how Britain ranked in terms of attractiveness for energy investments, Sawan said the US was “ahead significantly” and that Europe was also ahead of Britain.

Campaigners call for end to ‘peak fare rip off’ on trains in England and Wales

Campaigners are calling for an end to the “peak fare rip off”, where commuters in some parts of the country face far higher mark-ups to travel at busy times.

The call came after regulated rail fares in England and Wales jumped by 5.9% on Sunday – the biggest hike in a decade – adding hundreds of pounds to the cost of many annual season tickets despite record levels of poor service.

Consumer groups are now urging operators to make peak fares – which are not necessarily affected by the 5.9% rise – more equitable across the country and to reduce them on less popular days to combat overcrowding.

The news that London listed big data firm WANdisco is eyeing New York to create a dual listing (see 7.25am) is a reminder of the City’s struggles to attract tech companies.

Victoria Scholar, head of investment at interactive investor, says London is not facing a ‘mass exodus’, but points out that recent technology floats have struggled:

According to Sky News, it has hired bankers from Evercore Partners to help with the preparations. WANdisco’s chairman and CEO David Richards first discussed the possibility of a US listing in 2017.

The news comes after Arm Holdings abandoned London as a potential location for its IPO, FTSE 100 building business CRH also said it was planning to list in the US and Flutter was considering a secondary listing in New York. This has raised concerns about a potential flight of listed businesses away from the London Stock Exchange post Brexit to the United States. However we are far from seeing a mass exodus from the London market as of yet. The City has so far managed to preserve its position as Europe’s leading global financial hub.

One of the biggest challenges for the UK market has been its struggle to attract tech giants. New York continues to be the go-to destination for tech behemoths with the Nasdaq boasting giants like Apple, Microsoft and Amazon. While the FTSE 100 enjoyed relative resilience last year in part thanks to its shortage of tech stocks, this has long been a criticism and meant that the UK large-cap index missed out on the gains enjoyed stateside from the tech boom prior to 2022.

There have been some high-profile tech disasters in London including Deliveroo’s calamitous IPO and THG’s share price slide, adding to the sense of caution towards the UK among tech businesses deciding where to list.”

Big data company WANdisco eyes US stock market listing

WANdisco, a ‘big data’ business listed in London, has joined the growing ranks of companies considering a listing on the New York stock exchange.

WANdisco, which is headquartered in Sheffield, England and San Ramon, California, has told the City this morning that it is in the early stages of exploring a listing in the US, to run alongside its London listing.

Yesterday, Sky News reported that WANdisco was preparing to list its shares in the US “amid an intensifying debate about the waning attractiveness of the City to public companies”.

Last week, UK chip designer Arm chose to only list in the US, rebuffing London, and building materials giant CRH laid out plans to move its shares to the US.

WANdisco reminds shareholders that it has been considering a listing in New York for some time, and isn’t planning to quit London.

It says this morning that:

As a dual UK and US headquartered technology company, WANdisco has long-stated its intention to consider an additional listing of its ordinary shares in the United States. The company can confirm that it is in the early stages of proactively exploring this option.

The Company also confirms that it remains committed to London’s Alternative Investment Market (“AIM”) and to maintaining its current UK AIM listing.

Introduction: UK car sales jumped 25% in February

Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy.

UK car sales jumped by a quarter last month, while the cost of travelling by train across the country has risen again.

British new car registrations rose by a quarter in February, according to preliminary industry data released on Monday.

The Society of Motor Manufacturers and Traders (SMMT) said the new car market grew by 25% last month in a year-on-year basis, despite the economic pressures from the cost of living crisis on households.

Plug-in electric vehicles made up about a quarter of the registrations, meaning that almost half a million plug-in cars are expected to join the road by the end of 2023.

The final data, from trade body SMMT, is due at 9am this morning.

Last weekend, train passengers were hit by the largest increase in fares for more than a decade on Sunday despite record levels of poor reliability.

Fares in England and Wales rose by up to 5.9% on average, adding hundreds of pounds to the cost of many annual season tickets.

It’s the largest increase in annual fares since a 6.1% hike across Britain in 2012, analysis shows. More here:

Investors are digesting the news that China’s government has set a modest target for economic growth this year, as the annual session of its National People’s Congress (NPC) begins.

Beijing is aiming foreconomic growth this year of around 5% on Sunday, below last year’s goal of 5.5%, but above the 3% growth actually achieved.

The latest surveys of purchasing managers will show how construction firms in the UK, and across Europe, fared last month.

• 8.30am GMT: eurozone construction PMI report for February

• 9am GMT: UK new car registrations for February

• 9.30am GMT: UK construction PMI report for February

• 10am GMT: Eurozone retail sales for January

• 10am GMT: European Central Bank chief economist Philip Lane gives a lecture at Trinity College in Dublin

• 3pm GMT: UK factory orders for January