UK new car sales fall again; yuan slips amid US-China trade tensions – business live

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UK new car sales fall in January, industry data shows

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New car registrations in the UK dropped in January, preliminary industry data showed on Wednesday, due to slower demand from both fleet and private buyers.

The Society of Motor Manufacturers and Traders (SMMT) reported that overall registrations fell to approximately 137,000 units in January, with over a fifth of those being electric vehicles, aligning with the industry’s continued commitment to the shift towards EVs.

That means a small year-on-year drop in car sales – in January 2024, 142,876 new cars were registered.

The SMMT is due to release their full report at 9am.

Ian Plummer, commercial director at Auto Trader, reports an increase in interest in electric cars – which could help the UK hit its target of banning the sale of new petrol and diesel cars by 2035.

“January marked a lacklustre start to 2025 for the new car market, as registrations fell for the fourth month in a row. This year will offer its fair share of challenges for established brands, amid economic uncertainty, tariff threats from the US and fierce competition from a growing array of new Chinese entrants.

“A look under the bonnet however does offer some optimism for the industry, with visits to our new car platform up over 20% following the festive lull.

“And we can also see the big increase in electric car enquiries made on our platform late last year already playing through into the market, which will come as some relief to manufacturers facing another steep increase in ZEV mandate targets in 2025. There’ll be no let-up in pressure to maintain electric vehicle demand and hit the 28% target, likely resulting in offers to entice buyers over the coming months.”

The agenda

9am GMT: eurozone services and composite PMI for January
9am GMT: SMMT data on UK car sales in January
9.30am GMT: UK services and composite PMI for January
3pm GMT: US services and composite PMI for January

Key events

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China's CSI 300 sees 'measured' losses

Chinese stocks have slipped on the first day of trading after the lunar New Year holidays.

The CSI 300 index of big Chinese companies traded in Shanghai or Shenzhen has slipped by almost 0.6% today.

Ipek Ozkardeskaya, senior analyst at Swissquote Bank, says:

The Chinese markets opened for the first time after a long Lunar New Year holiday, and they opened down on a set of weaker-than-expected PMI figures, on the news of 10% tariff on its exports toward Trump’s USA, and a further escalation of the trade war with the tit-for-tat measures announced yesterday from Beijing, including 15% tariffs on US coal and LNG imports and an antitrust probe into Google.

But losses in the CSI 300 index remained measured, as the 10% tariffs from the US were considered as being quite modest – compared to the chatter of up to 60% tariffs, and China’s response to the US was also seen moderated.

Markets calmer over trade war fears

After the mayhem of ‘Manic Monday’, a level of calm has returned to the financial markets today (despite the weakening yuan).

The pound has hit a one -week high of $1.249 last night, recovering all its losses earlier this week as fears of a global trade war hit investor confidence.

Wall Street recovered its poise too yesterday, with the Dow Jones industrial average gaining 0.3%.

Traders are relieved that Donald Trump suspended US tariffs on Canada and Mexico for 30 days on Monday night – although also aware that only kicks the can down the road for a month.

Michael Brown, senior research strategist at Pepperstone, says:

In fact, this whole saga could well rumble on until the start of April, when the review ordered by President Trump into US trade policy is due to report back.

Perhaps, it is at that point, that we will see tariffs shift from being used as a bargaining chip to further certain political aims, to actually being used as a measure to address trade imbalances. Still, whatever the purpose, the whole thing remains a zero-sum game.

Yuan slips on trade-war anxiety

China’s currency has weakened as financial traders return to work after the Lunar new year.

The eruption of the new US-China trade war this week, which saw tariffs added to exports between the two countries yesterday, has ended the holiday spirits.

This pushed the yuan towards the 16-month low set last month.

But the fall in the yuan has been cushioned by China’s central bank, as Reuters explains:

The dollar rose more than 0.5% against the yuan to a high of 7.2863 in onshore trade, though its gains were capped by the People’s Bank of China (PBOC) setting a stronger-than-expected yuan midpoint rate, around which the currency is allowed to trade in a 2% band.