By Marcus Leach

On a day when UK manufacturing appeared to take a backwards step, there was positive news from the Society of Motor Manufacturers and Traders (SMMT), who reported a 1.8% rise in new car sales.

Sparked by an increase in private sales, which were up 7.4%, and the new 12-number plate, the figures suggest confidence may in fact be returning to the British economy.

“These are an encouraging set of figures," Graham Smith, global head of automotive and diversified industrials at KPMG, said.

"Optimism appears to be growing, with the 12-plate making its usual contribution in March. It’s clear there’s a buyers’ market out there which is being driven by low interest rates.

“Car brands are competing for market share. Retail and private buyers are returning to the market with some competitive deals as the continued stability provided by a low bank base rate gives buyers some confidence to change their vehicle.

“At a fleet level there is also extreme competition, with significant price pressure in the premium sector, which is resulting in exceptional deals being available as manufacturers and leasing companies take some brave decisions around future residual values in their quest to gain market share.”

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