The week ahead 08 June 2026 - UK car sales rise as motorists pivot to electric
What to watch out for in the UK economy and property market this week.
May saw robust sales for UK cars, with nearly 167,000 new vehicles sold, up from 149,000 in April, according to SMMT. The year-on-year increase was 7.1%, making it the best May since 2019. There was a continuation of the recent trend of higher sales for battery electric and hybrid cars outweighing declines for petrol and diesel engine vehicles. Year-to-date sales of battery electric cars are up 24.3% compared to the equivalent period of 2025.
The news follows recent reports of increased sales and installations of solar panels in the UK. All this suggests consumers are responding to the surge in petrol and gas prices by investing in green technology. We believe this could provide upside for the UK economy this year to counterbalance some of the negative impact of high energy prices.
Evidence has emerged suggesting the UK housing market might be decelerating. The latest Nationwide House Price Index reported a -0.6% month-on-month decline in May, down from 0.4% growth in April. That reduced the annual growth rate from 3.0% in April to 1.7% in May, well below the consensus forecast of 2.9%. Nationwide cited the ongoing uncertainty created by the war in the Middle East.
Across the Atlantic, encouraging data on the US labour market was published. Non-farm payrolls increased by 172,000 posts in May, down slightly on the April figure of 179,000 but well ahead of the consensus forecast of 85,000. While payroll growth in the private sector fell from 177,000 in April to 120,000 in May, government payrolls increased markedly. The unemployment rate remained unchanged at 4.3%, defying predictions of a rise to 4.4%. This suggests that higher energy prices have not impacted the US jobs market as much as forecasters had feared.
This week sees the ECB hold its policy meeting, and it is widely expected that interest rates will be increased by 15 bps, due to rising inflation in the Eurozone. Inflation in May reached 3.2% in the Euro Area, up from 3.0% in April. Core inflation (which excludes fuel and food prices) increased from 2.2% in April to 2.5% in May.
On Friday, monthly GDP data for April will be published for the UK. March saw GDP growth that was stronger than expected, and business surveys suggest that the impact of the Iran war on the economy only started to come through strongly in May. For this reason, we are predicting continued GDP growth in April, but at a slower pace than in March.
This week’s figures
THURSDAY 11 JUNE
ECB Interest Rate Decision, June
2.00% PREVIOUS
2.15% FORECAST
Given core inflation increased in the May figures, while headline inflation is well above target, we believe the ECB will increase its policy interest rate by 15 bps.
FRIDAY 12 June
UK GDP Growth, m-on-m, April
0.3% PREVIOUS
0.1% FORECAST
Survey evidence suggests that UK firms benefitted from clients pre-empting rising prices by bringing forwards purchases into March and April. So, we are forecasting further growth in April but at a lesser rate than recorded in March.
