Thursday, 5th April: March is known as one of the two top-selling months of the year in the UK for new car sales as it is when new licence plates are issued. However, new car registrations last month were 15.6% lower in comparison to March 2017, following a large drop in demand for diesel cars in particular. The comparative figure for sales in 2017 however was also affected by consumers’ incentive to avoid the tax rise which was implemented April 2017, and caused a large increase in new car sales in March 2017.
Car sales aren’t the only factor signalling further declines in the economy though, as the Markit services PMI result on Thursday demonstrated a fall to 51.7 in March from 54.5 in February, which is also the lowest reading since July 2016, and follows the same trend we have seen in the construction PMI result this week. The marketing PMI mentioned on Tuesday seems to be the only result which has demonstrated a marginal increase thus far. Regardless of all of this, market expectations still suggest that the Bank of England will commence with raising interest rates in May and won’t be discouraged by the recent economic data releases.
On the FTSE 250, Rank Group was performing particularly badly after a trading update revealed a decline in revenue and profits. The share price was cut by almost 16% at one point and the group ended the day 15.7% lower. Sophos Group went in the opposite direction, trading 15.5% higher at the close after their trading update which revealed Q4 billings were going to be towards the higher end of the guidance which was previously mentioned.
The blue-chip index managed to do a u-turn today regardless of the economic data. As concerns regarding the trade war between the US and China began to calm, the index reacted positively and maintained the impressive gains for the entirety of the day. The index closed 2.35% higher at 7199.5, and the FTSE 250 closed 1.62% higher.