UK car sales jump as two millionth EV registered
Newsflash: UK car sales jumped in April, driven by stronger demand for electric cars.
The UK new car market grew by 24.0% year-on-year in April, with 149,247 new cars registered in the month, according to the Society of Motor Manufacturers and Traders (SMMT).
That’s the best April for car sales since 2019, and follows a notably weak April in 2025, when new vehicle tax increases came in.
The SMMT also report that the UK’s two millionth battery electric car was registered in April, which they call a “market milestone”.
Battery electric car registrations were up 59% year-on-year in April, while plug-in hybrid registrations rose 46.4% and hybrid electric vehicles registrations were up 18.8%.
Sales of petrol cars rose 8%, while diesel car sales dropped 1%.
The SMMT has revised up its forecast for total new car registrations this year to 2.093m. up from January’s forecast of 2.048m.
However, it has cut its forecast for battery-powered cars’ share of the market to 26.8%, from 28.5%, “following an underperforming first quarter”.
The industry group is worried that concerns over inflation, higher energy prices and the resultant negative impact on the cost of living could hit demand for electric cars, even though the jump in energy costs since the Iran war began is boostering interest in EVs.
Mike Hawes, SMMT chief executive, says:
April’s rebound is welcome, but underlines just how significantly fiscal changes can influence the market. Two million electric car registrations is a considerable milestone to celebrate, although natural demand is still well below the level demanded by the mandate.
The mounting cost of compliance threatens to limit consumer choice, overall decarbonisation and the sector’s competitiveness so the need for a rapid review of the transition to align policy with market realities is unchanged, else Britain’s attractiveness as a vehicle market and manufacturing hub will be put at risk.
Key events
The UK is on track to miss its targets for electric car take-up, the SMMT fears.
The SMMT estimates that BEVs will make up 32% of the market in 2027, “leaving a persistent gap of around six percentage points against the mandate target”.
It says today:
Year to date, BEVs comprise 23.1% of the overall new car market, significantly short of the 33% required by the Zero Emission Vehicle Mandate, despite billions in manufacturer discounts and the introduction of the Electric Car Grant last year.
Chart: UK car sales by fuel type in April
UK car sales jump as two millionth EV registered
Newsflash: UK car sales jumped in April, driven by stronger demand for electric cars.
The UK new car market grew by 24.0% year-on-year in April, with 149,247 new cars registered in the month, according to the Society of Motor Manufacturers and Traders (SMMT).
That’s the best April for car sales since 2019, and follows a notably weak April in 2025, when new vehicle tax increases came in.
The SMMT also report that the UK’s two millionth battery electric car was registered in April, which they call a “market milestone”.
Battery electric car registrations were up 59% year-on-year in April, while plug-in hybrid registrations rose 46.4% and hybrid electric vehicles registrations were up 18.8%.
Sales of petrol cars rose 8%, while diesel car sales dropped 1%.
The SMMT has revised up its forecast for total new car registrations this year to 2.093m. up from January’s forecast of 2.048m.
However, it has cut its forecast for battery-powered cars’ share of the market to 26.8%, from 28.5%, “following an underperforming first quarter”.
The industry group is worried that concerns over inflation, higher energy prices and the resultant negative impact on the cost of living could hit demand for electric cars, even though the jump in energy costs since the Iran war began is boostering interest in EVs.
Mike Hawes, SMMT chief executive, says:
April’s rebound is welcome, but underlines just how significantly fiscal changes can influence the market. Two million electric car registrations is a considerable milestone to celebrate, although natural demand is still well below the level demanded by the mandate.
The mounting cost of compliance threatens to limit consumer choice, overall decarbonisation and the sector’s competitiveness so the need for a rapid review of the transition to align policy with market realities is unchanged, else Britain’s attractiveness as a vehicle market and manufacturing hub will be put at risk.
Full story: HSBC profits fall amid $400m fraud-related charge and Iran war
Kalyeena Makortoff
HSBC has taken a $1.3bn (£961m) hit to profits, fuelled by the fallout from the US-Israel war on Iran and fraud in the troubled private credit sector.
The London-headquartered bank said profits fell 4% in the first three months of the year, dropping $100m to $9.4bn, compared with the same period in 2025. Revenue increased 6% to $18.6bn.
The profit decline was linked to a jump in the potential losses it could see on soured loans to $1.3bn, which included $300m specifically linked to the impact of the conflict in the Middle East.
HSBC also reported a $400m “fraud-related, secondary, securitisation exposure” in the UK, related to its investment banking division. The bank’s chief financial officer, Pam Kaur, explained that the charge involved loans that HSBC had made to an unnamed private equity group, which was then exposed to private credit-related loans.
The case reportedly relates to the home loan lender Mortgage Financial Solutions (MFS), according to the Financial Times, which cited people familiar with the matter. HSBC refused to confirm the name of the firm involved in the suspected fraud.
More here:
Philippines inflation hits three-year high as Iran war drive up costs
Over in the Philippines, inflation has soared to a three-year high as the cost of food and energy is driven up by the Iran war.
Philippines inflation jumped to 7.2% in April, up from 4.1% in March, the Philippine Statistics Authority reports, the highest rate since March 2023.
Food and non-alcoholic beverage inflation more than doubled to 6.5%, up from 3.1% n March.
Transport inflation jumped to 22.1% in April, up from 9.6%, while the index for housing, water, electricity, gas and other fuels rose to 7.8% from 4.3% in March.
Analysts have suggested the Philippine central bank may need to implement more aggressive interest-rate hikes to cool this inflationary surge.
Those credit losses have “overshadowed” HSBC’s results in the last quarter, reports Will Howlett, financials analyst at Quilter Cheviot:
HSBC’s quarter was dominated by a sharp and unexpected jump in credit losses, which took the shine off otherwise solid trading and pushed profits just below expectations. A $400m fraud-related loss in the UK drove a marked rise in bad loan charges and has put fresh focus on the risks sitting within more complex lending, even as the rest of the loan book remains stable.
Profits were broadly flat on last year, as higher income was absorbed by rising costs and credit charges. Revenues grew 4%, slightly ahead of expectations, helped mainly by fees rather than interest income. Wealth management continued to perform well, though growth has slowed from last year’s pace.
The credit charge was the clear surprise. Total loan losses rose to $1.3bn, driven by the UK fraud case alongside more cautious assumptions linked to the Iran conflict and a weaker global outlook. There were no meaningful signs of stress in Hong Kong or mainland China commercial property, which will be a relief to investors. While the UK loss has raised questions about private credit and structured lending, it appears to be a one-off rather than evidence of broader problems.
Here’s Chris Beauchamp, chief market analyst at investing and trading platform IG, on HSBC’s earnings:
“HSBC’s results always bring more of an international flavour than its UK peers. Unfortunately that means the Hormuz crisis looms large in the results, casting a shadow over an otherwise solid set of numbers.
The theme is grimly familiar to investors; were it not for the crisis, earnings outlooks would be much rosier. The warnings around the economic impact will only continue to grow the longer the situation remains unresolved.”
There’s a mood of post-bank holiday glumness in the City this morning.
The FTSE 100 share index has dropped by 103 points, or 1%, to 10,260 points, with financial stocks leading the fallers.
HSBC (now -5.4%) are still the top faller, followed by Standard Chartered (-3.1%) and Lloyds Banking Group (-2.9%).
Precious metals producer Fresnillo (-2.8%) also made a poor start to the week, following a drop in the gold price yesterday.
The oil price has dipped slightly this morning, after a jump on Monday.
Brent crude is down almost 1% at $113.41 a barrel, a day after jumping by 5.8% after the US launched an operation to reopen the strait of Hormuz.
UK borrowing costs jump in early trading
UK government borrowing costs are rising this morning, amid concern that the Middle East conflict is intensifying.
The yield, or interest rate, on both short-dated and long-dated UK debt has jumped at the start of trading this morning, as investors return to their desks after Monday’s bank holiday.
The yield on 30-year UK bonds has jumped by 8 basis points (0.08 of a percentage point) to 5.73bps. That takes it close to the seven-month high hit last week, which was almost a 28-year high.
The yield on benchmark 10-year UK gilts is up 8bps too, to 5.05%, while two-year gilt yields are up 10bps to 4.51%.
Yields rise when prices fall, and London is catching up with a global bond sell-off yesterday when the oil price jumped after the US and Iran launched new attacks in the Gulf on Monday.
As Jim Reid of Deutsche Bank told clients this morning:
Earlier yesterday, Iran’s military had warned that the strait remains closed, with reports of a couple of ships coming under attack. Oil prices spiked after Iranian media reported that its missiles had struck a US naval ship, but this move reversed after denials by the US and follow-up Iranian reporting of a “warning shot”.
HSBC shares drop
Ouch. Shares in HSBC have dropped by over 5% at the start of trading in London.
HSBC (-5.2%) are the biggest faller on the FTSE 100 share index, after the bank reported a drop in profits this morning and that $400m fraud-related loss in the UK.
On the upside, HSBC is expecting to benefit from higher interest rates this year.
The bank has lifted its forecast for Net Interest Income (NII) – which is the difference between the revenue it gets from interest-bearing assets (such as loans, investments) and the expenses paid on liabilities (such as customers’ saving deposits, and its own debt).
HSBC expects banking NII of around $46bn in 2026, “reflecting an improved interest rate outlook.
It had previously forecast NII of “at least $45bn” for this year.
HSBC has lifted its forecast for expected credit losses this year, following that UK fraud-related $400m charge, and the Iran war.
The bank now expects an ECL [expected credit loss] charge as a percentage of average gross loans to be around 45bps this year, which it says reflects “ongoing uncertainty in the outlook”.
That’s up from its previous ECL guidance for 2026 was around 40bps of average gross loans.
FT: Rachel Reeves rowed with Scott Bessent over Iran war criticism
The Financial Times have a corking story this morning – UK chancellor Rachel Reeves had a “fierce row” with US Treasury secretary Scott Bessent in Washington last month, they say.
The pair of finance ministers clashed over the Iran war on the sidelines of the IMF’s Spring Meeting, after Reeves said she was “not convinced” that “we are safer today than we were a few weeks ago”.
That criticism led Bessent to “berate” Reeves, insisting the world was safer because of the US-Israeli war against Iran, even invoking the spectre of Tehran launching a nuclear attack on London.
As the FT reports, Reeves hit back:
Reeves responded angrily by telling Bessent she did not work for him and disliked how he had spoken to her.
She also reiterated her argument about the Iran conflict lacking clear goals and not necessarily making the world safer.
Reeves was notably critical of the Iran war as she headed to the IMF gathering, telling the Daily Mirror:
“This is a war that we did not start. It was a war that we did not want. I feel very frustrated and angry that the US went into this war without a clear exit plan, without a clear idea of what they were trying to achieve. And as a result the strait of Hormuz is now blocked.”
Introduction: HSBC profits hit by fraud-related credit loss in UK
Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy.
The bank reporting season rolls on, with HSBC revealing a drop in profits in the last quarter – partly due to a fraud-related charge in the UK.
HSBC reported it had suffered a $400m “ fraud-related, secondary, securitisation exposure” in the UK, in its Corporate and Institutional Banking (‘CIB‘) business.
This $400m charge is understood to involve loans made to a private equity firm, which was then exposed to private credit-related loans – at a time when concern about the opaque private credit industry is growing.
The $400m charge pushed up HSBC’s estimated credit loss for the first quarter of this year, to $1.3bn.
HSBC also set aside $300m to reflect “heightened uncertainty” and a deterioration in the economic outlook due to the conflict in the Middle East.
Overall, pre-tax profits fell by $100m, compared with the first quarter of 2025, to $9.4bn in January-March this year.
HSBC says:
The decrease reflected higher expected credit losses and other credit impairment charges (‘ECL‘) in 1Q26, an adverse impact from notable items and a rise in operating expenses.
The bank is sticking with its financial targets, arguing it is well-positioned to handle the “changes and uncertainties” in the global environment.
It tells shareholders:
The macroeconomic outlook is facing heightened uncertainty, creating volatility in both economic forecasts and financial markets resulting in both tailwinds and headwinds.
The Group is well-positioned to manage the impacts of these challenges through our high-quality revenue streams, conservative approach to credit risk and strong deposit franchise. Supporting our clients through this volatile period is a top priority.
The agenda
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9am BST: UK car sales for April
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1.30pm BST: US trade report for March
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3pm BST: US service sector PMI
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