New car registrations in July dropped 4.1% year-on-year to 157,198, the lowest number for the month since 2012, while sales for the year to date were 3.5% lower at just over 1.4 million, the Society of Motor Manufacturers and Traders said.

"Political and economic uncertainty and confusion over future government policy on different fuel types continued to knock consumer and business confidence," the SMMT said.

Sales of diesel-powered cars were down by more than a fifth, while petrol car volumes were stable and electric car sales were up strongly from a low base.