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In this week’s roundup, we discuss stalling car sales, improved performance of European shares, the ongoing impact of Brexit on the UK economy and improved consumer spending. 

UK car sales dip for fifth consecutive month

The UK new car industry dipped for the fifth consecutive month in August, making it the longest consecutive run of declines since 2011.

According to the Society of Motor Manufacturers and Traders (SMMT), sales dipped by an annual 6.4% to just over 76,000 vehicles. In addition, the number of diesel car registrations fell by 21.3%, suggesting that consumers are being put off by the potential government penalties being introduced on vehicles that contribute the most to pollution.

However, Mike Hawes, chief executive of SMMT, expects demand to return in September. “With the new 67-plate now available and a range of new models in showrooms, we anticipate the continuation of what are historically high levels of demand [this month],” he said.

European shares on the up

European shares jumped higher this week after it was announced that Britain’s Aveva Group has agreed to combine with France’s Schneider Electric’s software business in a deal worth more than £3 billion.

The pan-European STOXX 600 index rose 0.2% on Tuesday, with financials and health stocks underpinning broader gains. Furthermore, Eurozone blue chips gained 0.3%.

In addition, the FTSE 100 index was up 0.3%, alongside Germany’s DAX index, which grew by 0.4%.

Brexit concerns ‘causing UK economy slowdown’

The findings of a new survey suggest Britain’s economy is starting to lose momentum as a result of mounting Brexit concerns.

In August, the IHS Markit/CIPS Services Purchasing Managers’ Index recorded its lowest reading since September 2016 - shortly after the result of the European Union referendum -  falling to 53.2 from 53.8 in July.

This means growth in the UK’s dominant services sector is slowing, and the experts at IHS Markit believe this, combined with weaker performance in construction, means Britain’s economy is set to grow by just 0.3% in the third quarter of 2017.

Chris Williamson, chief business economist at IHS Markit, said: "The overall level of optimism also remained subdued, mainly linked to Brexit uncertainty, close to levels that have previously been indicative of the economy stalling or even contracting."

British consumers up their spending in August

UK consumers increased their spending at the fastest rate seen in 2017 in August, according to new figures from the British Retail Consortium (BRC).

Retail sales rose year-on-year by 1.3%, and month-on-month by 2.4% - making it the highest non-Easter reading of the year.

Despite the positive figures, BRC chief executive Helen Dickinson said: “These figures tell a less positive story about the health of consumer spending than it might seem at first glance.”

This is because non-food spending remained at the same level as recorded in 2015, while growth in the volume of food sales was weaker than it was in 2016.

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