Technical pricing organisation for the new car industry CAP has claimed downward pressure on Sterling as a result of the latest Budget announcement could help to offset the risk of oversupply in the UK's automotive sector.

"From a residual value perspective it is good to have the downside pressure on Sterling increased by the Bank of England and sensible to announce a downgrading of the UK growth forecast," commented CAP's senior editor for forecasting Dylan Setterfield.

According to the organisation, falling registrations in Europe last year meant many manufacturers were shifting their focus to the burgeoning UK market, but with Sterling now losing some of its strength the risk of a considerable hit on vehicle values due to oversupply is now falling.

The news follows recent data from the Society of Motor Manufacturers and Traders highlighting a 12th consecutive month of growth for new car registrations in the UK in February.

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