8:38 am, July 14, 2008
SIMPLY holding interest rates at 5 per cent is not enough to stimulate consumer spending.
That’s the view of the National Franchised Dealers Association, speaking about last week’s interest rate announcement.
‘Current economic uncertainty is making consumers cautious about making major purchases, such as a new car,’ said director Sue Robinson.
‘Many will wait to see how the situation plays out through the summer. By not trying to combat such hesitance, the Bank of England is in danger of making the situation worse.’
As the RMI NFDA points out, forthcoming changes to VED could actually double overall car tax for some motorists. Evidence shows only a third will be taxed at a lower rate – with 44 per cent actually paying a higher rate.
Robinson added: ’A recent study showed that despite appearances, the real cost of car ownership has actually fallen in the last 20 years.’
‘With prevailing high interest rates, and the proposed VED changes, the Government seems determined to reverse this trend.’
