Gordon gives Darling a well earned pat on the back as new car sales rise in June

You could almost hear the cries of " look Gordon, it worked" reverberating around Downing Street over the last few days with the announcement that sales of new cars rose for the first time in 15 months in July, as the government’s innovative "cash-for-bangers" scheme appeared to be finally coaxing more buyers back into new car showrooms.

Since the scheme was launched in May, official figures show that orders have been placed for more than 150,000 new cars have been ordered through the government’s scrappage scheme, meaning that that more than half of the money set aside to fund the scheme has already been taken up.

Already a lobby group representing dealers has been mustered to call for the scheme incentives to be extended when the scheme’s funding ends, stating that argument that the government’s £300 million programme has already been recovered due to the tax receipts earned in the sales. .

According to data published by the Society of Motor Manufacturers and Traders (SMMT), registrations of new cars rose by 2.4 per cent last month to a total 157,149 units, marked their first year-on-year rise since April of 2008. According to the SMMT 21 per cent of last month’s registrations were a direct result of the scrappage scheme, with almost one-fifth of that number emanating from orders placed in the South East of England.

Sales of small car sales appeared to be growing the fastest, and Ford Motor’s Fiesta model was the UK’s best-selling car. Registrations of mini segment cars more than tripled in July, while registrations of "super-minis" rose by more than fifteen percent.

Meanwhile an independent analyst also announced that while the increased sales of new cars could be directly attributed to the scrappage scheme, the year-on-year rise may also be a further sign that a significant number of UK consumers are now enjoying the ability to step up their discretionary spending.

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Tags: Alastair Darling, British Economy, cash-for-bangers, Credit Crunch, Downing Street, Economy, Gordon Brown, Money, Money Management, Retail, scrappage scheme, SMMT, Society of Motor Manufacturers and Traders