Closing summary
The Treasury has unveiled a support package worth more than £80m a year for pubs and live music venues in England and Wales, in a climbdown that follows a fierce backlash against plans to overhaul business rates.
Trade bodies had warned that Rachel Reeves’s changes to business rates, announced at the chancellor’s November budget, would trigger widespread closures and job losses in the hospitality sector, particularly in pubs.
On Tuesday, the government announced financial support to mitigate the effect of the rates shake-up, after officials admitted that they had not foreseen its total financial impact.
The package, final details of which were still being hammered out on Monday night, is expected to be worth more than £80m a year, over three years, for pubs and gig venues.
Dan Tomlinson, the exchequer secretary to the Treasury, said every pub in England and Wales would get 15% off its new business rates bill from 1 April, worth an average of £1,650 for each. Bills will then be frozen in real terms, factoring in inflation, for a further two years.
Tomlinson said:
This support is worth £1,650 for the average pub just next year, and will mean that around three-quarters of pubs will see their bills either fall or stay the same next year.
Tomlinson said three-quarters of pubs would see their rates bill fall or stay the same next year and rates across the sector as a whole would be lower in 2028-29 than they are now.
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Rachel Kelly, associate policy director of the British Property Federation, said:
We welcome any additional support for pubs but the fact that emergency measures are needed just weeks after Government introduced its new two-tier system for business rates shows the changes have not been properly considered.
The withdrawal of business rates relief for high street businesses has only been partially offset by the new split system, whereby smaller retail and hospitality premises pay a lower level of tax than larger, more valuable properties. This change hits all parts of the economy, with shops and restaurants as well as larger offices, warehouses and manufacturing buildings all potentially facing higher bills.
The changes have made a bad system worse and Government must ultimately lower and fix the multiplier tax rate and move to annual revaluations to avoid these sudden swings and emergency measures in the future.
The Institute of Directors says the business rates system needs a broader overhaul.
Anna Leach, chief economist at the IoD, said:
The Institute of Directors welcomes today’s decision by the government to provide targeted business rates relief for pubs, recognising the intense pressures facing this sector. This support will offer much-needed breathing space for businesses grappling with rising costs and tight margins.
More broadly, the business rates system remains in urgent need of reform to address the disincentives to investment embedded in the current framework, and we welcome the government’s commitment to take action in this area.
That said, stronger policy design at an earlier stage would deliver greater benefits for business confidence, planning and costs. We reiterate our call for more detailed, sector-by-sector analysis of the impacts of tax changes to be undertaken alongside each budget. This would allow concerns to surface earlier in the process, enabling risks to be identified and addressed before they crystallise.
Treasury unveils support package worth over £80m a year for pubs and live music venues
The Treasury has unveiled a support package worth more than £80m a year for pubs and live music venues in England and Wales, in a climbdown that follows a fierce backlash against plans to overhaul business rates.
Trade bodies had warned that Rachel Reeves’s changes to business rates, announced at the chancellor’s November budget, would trigger widespread closures and job losses in the hospitality sector, particularly in pubs.
On Tuesday, the government announced financial support to mitigate the effect of the rates shake-up, after officials admitted that they had not foreseen its total financial impact.
The package, final details of which were still being hammered out on Monday night, is expected to be worth more than £80m a year, over three years, for pubs and gig venues.
Dan Tomlinson, the exchequer secretary to the Treasury, said every pub in England and Wales would get 15% off its new business rates bill from 1 April, worth an average of £1,650 for each. Bills will then be frozen in real terms, factoring in inflation, for a further two years.
Tomlinson said:
This support is worth £1,650 for the average pub just next year, and will mean that around three-quarters of pubs will see their bills either fall or stay the same next year.
Tomlinson said three-quarters of pubs would see their rates bill fall or stay the same next year and rates across the sector as a whole would be lower in 2028-29 than they are now.
Updated
The support package for pubs and music venues is worth more than £80m a year, according to the Treasury.
We are waiting for more details…
Updated
The National Pharmacy Association, which represents 6,000 community pharmacies across the UK, said excluding pharmacies that play a “vital role” on British high streets, from the support package is “an insult”.
Henry Gregg, chief executive of the National Pharmacy Association said:
This increase will push some pharmacies to the brink of collapse.
Pharmacies are essential to their communities but the government have taken a decision today to prioritise pubs over the health needs of millions of people who use pharmacies every day.
It’s an insult to hard pressed pharmacists who are still struggling under the effects of historic NHS underfunding that simply isn’t sufficient to pay inflated business rates, medicine prices and their other bills.Pharmacies are not like pubs, cafes or restaurants. They receive 90% of their funding from the NHS and cannot simply increase their prices for the nations prescriptions to absorb this eye watering increase.
Denying pharmacies the business rate support that is available to GPs and other parts of the NHS is yet another example of them being treated as second class citizens in our health service. We should treat dedicated servants of our NHS better.
The British Chambers of Commerce welcomed the package but said business rates “tweaks” are not enough.
Kate Shoesmith, director of policy at the BCC, said it latest research shows that concern about business rates is its highest for at least eight years, with a third of all firms worried. In the hospitality sector that rises to 49%.
This is good news for pubs and music venues, but it does not go far enough to protect many other businesses which are under huge pressure.
Companies have proven remarkably resilient through years of turmoil, including Brexit, Covid, rising energy bills and geopolitical crises, but there are limits to how much they can endure.
With new employment legislation coming down the tracks, a further inflation busting rise in the minimum wage and continuing global headwinds, the government must ease this burden.
The Labour Manifesto, in 2024, correctly identified that business rates were a disincentive to investment, created uncertainty and placed an undue burden on high streets.
It pledged to reform them and it is now time the government delivered on that promise.
She said as a first step to fixing business rates, the government should move to annual revaluations, to give greater certainty around rateable value changes, and adopt a single flat rate 40p multiplier.
These changes would provide greater transparency, simplicity and fairness ahead of a full review of the system.
The emergency pubs relief will provide some respite, but the government must deliver urgently on its “promise to support the whole hospitality sector”, says the trade body UKHospitality.
Restaurants and hotels still face severe challenges.
Kate Nicholls, chair of UKHospitality, said:
We welcome the recognition by the prime minister and the chancellor of the scale of the challenges facing the hospitality sector. They have listened to us about the acute cost challenges facing businesses, all of which is impacting business viability, jobs and consumer prices.
The rising cost of doing business and business rates increases is a hospitality-wide problem that needs a hospitality-wide solution. The government’s immediate review of hospitality valuations going forward is clear recognition of this.
The devil will be in the detail, but we need to see pace and urgency to deliver the reform desperately needed to reduce hospitality’s tax burden, drive demand, and protect jobs and growth. We will work with the government over the next six months to hold their feet to the fire to deliver this.
This emergency announcement to provide additional funding is helpful to address an acute challenge facing pubs.
The reality remains that we still have restaurants and hotels facing severe challenges from successive budgets. They need to see substantive solutions that genuinely reduce their costs.
Without that clear action, they will face increasingly tough decisions on business viability, jobs and prices for consumers. Those are costs borne by us all, and I hope the government delivers on its promise to support the whole hospitality sector.
Whitbread, Mitchells & Buters shares rise
Shares in Whitbread, owner of Premier Inn and pub chains including Beefeater and Brewers Fayre, and pub operator Mitchells & Butlers rose after the support package was announced.
Whitbread is one of the main risers on the FTSE 100 index, up nearly 2%, while M&B shares gained 1%.
Government to publish highstreet strategy later this year
The government will publish a highstreet strategy later this year to help shops in towns and cities. Treasury minister Dan Tomlinson said:
We do understand it’s a tough time for other businesses on the high street.
We’ve already taken significant steps to acknowledge this and support businesses, including £4.3bn of business rate support at the budget.
But over the last decade consumers have changed their habits, increasingly working from home and shopping online, and these trends continue to make it harder for high street businesses.
He went on to say:
We will work with businesses and representative bodies to bring this strategy together.
It will be a cross-Government strategy, and we will be looking at what more government can do to support our high streets.
Pubs to be able to stay open late to show World Cup games this summer
Tomlinson told MPs that licensed venues could open until 1am or 2am in the summer in order to show games featuring UK teams during the men’s football World Cup. He said:
“We will legislate to increase the number of temporary events notices for pubs and other hospitality venues, whether that is to help them screen World Cup games or other community and cultural events.”
The Commons also heard the government will consult on loosening planning rules to help pubs, which could mean they will be able to add guest rooms or expand without planning applications. “We will also continue to engage with the sector to ensure that other retail, leisure and hospitality premises have flexibility,” Tomlinson said.
Treasury minister Dan Tomlinson told the Commons pubs had not had the support they have needed “for too long”, and referenced 7,000 pubs shutting under Conservative led-governments between 2010 and 2024. He told MPs:
“This government does want to go further to support pubs. Pubs are the cornerstone of so many communities, they are essential to the social and cultural life of so many places across the country … Today I can confirm that from April, every pub in England will get 15% off its new business rates bill on top of the support announced at Budget. Pubs’ bills will then be frozen in real terms for a further two years.
“This support is worth £1,650 for the average pub, just next year, and will mean that around three-quarters of pubs will see their bills either fall or stay the same next year. Then bills will be frozen in real terms for the next two years.”
He explained that the support will also apply to live music venues:
“This week is also independent venue week, so it’s particularly appropriate that I can announce also that our package will apply to music venues too. Many live music venues are valued as pubs and many pubs are grassroots live music venues. It would not be right to seek to draw the line so tightly so as to include some and not others.”
Treasury announces business rate support package ‘worth £1,650 per pub’
In a statement to the Commons, Dan Tomlinson, exchequer secretary to the Treasury, has announced changes to how it will impose business rates on hospitality venues.
He said the government “does want to go further to support pubs” and under the new measures every pub in England will get 15% off its new business rates bill from April. The bill will then be frozen in real terms, factoring in inflation, for a further two years.
He added that the package would apply to music venues too and the government also said the government would announce a review of the way hotels are valued.
The support package would be worth £1,650 for the average pub, Tomlinson said, and would mean three quarters of pubs would see their rates bill fall or stay the same next year. He said the decision would mean the amount of business rates paid by the pub sector as a whole would be lower in 2028/29.
He said the government would review the methodology used to calculate how much pubs should pay in rates, with the aim of completing this in time for the next revaluation.
Updated
We are still waiting for the exchequer secretary’s statement on a support package for pubs, which have been hit hard by changes to business rates.
The chancellor has just responded to questions about business rates for pubs.
The exchequer secretary will be setting out more detail of support for pubs later today, around 1.30pm, Rachel Reeves said.
We are determined to support pubs, often the lifeblood of so many communities, but also to support all of our retail, hospitality and leisure sector.
We are putting more money in people’s pockets by cutting energy bills, by cutting train fares and ensuring we’re getting people back to work. So they’ve got more money to spend on the things they love and not just the essentials.
She added:
I don’t think anyone in this house seriously believes that temporary support during the pandemic should continue infinitely. It would not be the right thing, and it would not be affordable for other taxpayers to do that. That’s why we are tapering gradually, with a £4.3bn support package in the budget and some more targeted support for pubs published later today.
She stressed that 7,000 pubs closed under the previous Conservative government, saying: “We have permanently lowered the tax rate that retail, hospitality and leisure pay.”
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Q: Another family run business in Chelmsford that’s been going for 25 years will see their monthly rates more than double from April. They’ve said they will simply have to close their doors if this goes ahead, resulting in 40 people losing their jobs.
Tomlinson replied:
The key thing to note here is that there is a significant difference between the change in the rateable value and the change in the business rates this year. We have stepped in to cap the increases for bills at £800 for those coming into the system for the first time, or for most high street businesses, the increase will be 15%. The very largest will see increases of 30%.
He also said:
I do understand that there are businesses all across the economy who will have seen increases in their rateable values since the pandemic. And that’s precisely why we stepped in with the support package.
The really small bookshops up and down the country, many, many of them will not be paying any business rates at all because they will be in receipt of small business rates relief. Of course, there will be some in some parts of the country that will have seen either the rates bill values increase or because of the government’s decision to slowly wind down the temporary pandemic support that will see an increase in their bills.
But we’re capping those increases this year and in subsequent years in order that the transition can be manageable for those businesses because of course, we want to support bookshops on our high streets. They are incredibly important, along with all the other high street retailers.
Treasury poised to unveil business rates support package ‘with focus on pubs'
Treasury questions have moved on to business rates.
Dan Tomlinson, exchequer secretary to the Treasury, said he will make a statement this afternoon on a “package of support in relation to business rates, with a particular focus on pubs”. This will come around 1.30pm GMT, after a statement from Matthew Pennycook, the housing minister, on leasehold reform.
As previously announced, we’re introducing a support package with £4.3bn to support ratepayers seeing increases in their business rates, bills.
In the budget, Rachel Reeves, the chancellor, announced a £4.3bn support package that included giving relief to businesses, intended to offset the end of a Covid support scheme that had reduced bills by 40%.
However, this has not proved to be enough to offset a significant increase in property tax bills caused by the first revaluations of properties since the pandemic from April.
Q: Joanna Watson runs hotels in Sidmouth, the Elizabeth Hotel and the Kingswood Hotel, and she’s essentially facing a 20% rise in her business rate costs. Joanna’s bills don’t reflect what she actually earns. They stay high all year round, even though there are months like in winter, when income completely collapses… Will he [Tomlinson] also consider the plight of hotels such as those in Sidmouth and say, we have considered the challenges that hospitality businesses and businesses on our high streets would face?
Tomlinson said:
That’s why we put in place the £4.3bn of support at the budget. But we do recognise that there are concerns as to how hotels are valued for business rates. And that will be one of the items that I’ll be talking about in the statement later today.
Updated
Rachel Reeves, the UK chancellor, is speaking during Treasury questions in the House of Commons. She has been asked about the energy profits levy on the oil and gas sector, affecting Scotland, which was introduced during the energy price spike after Russia’s invasion of Ukraine.
Q: Robert Gordon’s [University] have estimated that 400 jobs will be lost every week, given the importance of that sector, not just to Aberdeen or to Edinburgh West, but to the Scottish and the UK economy, will the chancellor think about providing the regional development support that the Scottish government is failing to do?
We’re supporting the transition, to new jobs and new industries, right across Scotland, including in Aberdeenshire.
“We are committed to driving growth everywhere,” she said earlier.
Updated
M&G to take £230m hit from ground rent cap
The UK fund manager M&G expects to take a one-off hit of £230m from the government’s proposed cap on ground rents.
Ground rents are to be capped at £250 a year for leaseholders in England and Wales, Keir Starmer has announced, as his government unveiled proposals to ban leaseholds for new flats. Millions of leaseholders stand to benefit from the overhaul of the leasehold system. Ground rents are set to be capped for a transition period of 40 years, and would then be reduced to zero.
Making the ground rent announcement in a video posted on TikTok, Starmer said:
Good news for homeowners, we’re capping ground rent at £250. That means if you are a leaseholder, and your ground rent is more than £250, you’ll be paying less.
M&G, however, argues that the changes are “disproportionate” and will “negatively impact savers and companies that have chosen to invest in UK assets”.
The firm, which was spun off from the insurance and pensions group Prudential in 2019, has £722m of ground rent assets in its Prudential Assurance Company shareholder fund.
M&G also said it is expecting a £15m hit to its annual adjusted operating profit from 2028, although it stressed that it is “well positioned to absorb and manage the negative impacts generated by this proposed legislation”.
Subject to parliamentary timings, the ground rent cap could come into force in late 2028.
The British Property Federation has warned that the government’s plan to cap ground rents could discourage investment into the UK, and argues that landlords should get compensation.
Updated
William Hill owner Evoke to shut some betting shops
Evoke, the heavily-indebted gambling company, says it plans to shut some of its network of 1,400 William Hill betting shops, blaming Rachel Reeves’ decision to increase taxes on the betting and gaming sector at November’s budget.
The London-listed company paid £2.2bn for William Hill’s non-US assets in 2021 but has since watched its own stock market value slide to less than £120m, amid a series of regulatory compliance problems and a burgeoning debt pile.
At the end of 2025, Evoke said it was considering a sale or breakup of the group, after warning of a £135m hit from tax increases announced in last month’s budget. Rises in gaming duty were targeted at online gambling, hitting Evoke’s 888 online casino brand.
On Tuesday, the company blamed tax rises again as it announced plans to sell off some of its betting shops, without saying how many of the roughly 1400-strong estate would go.
Its chief executive, Per Widerström, said Reeves’ tax grab on the sector “will negatively impact the industry’s economic contribution, customer protection, and will ultimately serve to support further growth in the illegal black market.”
Analysts at the stockbroker AJ Bell said William Hill had looked like a big prize in 2021 but had become “a thorn in Evoke’s side”.
It is expensive and cumbersome to have a big physical store estate yet finding a buyer for William Hill won’t be straightforward given the tax pressures.
Evoke may struggle to find someone to pay anything close to fair value, suggesting any asset sale could involve other parts of the group.
Gold, silver continue to climb; gold draws €2bn from European investors in 2026
As gold continues to climb, rising 1.6% to $5,094 an ounce this morning, just shy of yesterday’s all-time high, data shows the safe-haven asset has drawn €2bn from European investors so far this year.
European-domiciled gold exchange-traded funds have attracted more than €2bn since the start of 2026, according to Morningstar data, as the precious metal continues its rally. Gold prices rose by 64% in 2025, its best year since 1979.
Kenneth Lamont, principal, manager research at Morningstar, said:
Gold ETFs have attracted more than €2bn in net inflows since the beginning of the year, helping to propel prices to fresh record highs.
While strong price momentum is clearly drawing in short-term speculators, the rally also reflects a deeper sense of investor unease. Rising geopolitical tensions and escalating trade frictions have reinforced gold’s role as an “Armageddon” asset.
Recent flashpoints, including developments in Venezuela and uncertainty around potential US involvement in Iran and Greenland, have encouraged investors to reassess the concentration of risk within the global security and financial systems.
This reassessment has prompted central banks – particularly in emerging markets – to diversify away from US dollar-denominated reserves, a process that has increasingly involved the accumulation of gold.
Silver gained more than 8% to $112.3 an ounce, and is up 57% in January alone.
Updated
Puma shares surge after China's No 1 sportswear brand Anta buys 29% stake
Puma shares surged, after a 29% stake in the German sportswear maker was sold to China’s biggest sportswear brand Anta Sports Products.
Anta bought the holding from the Pinault family for €1.5bn, making it the biggest shareholder in Puma.
Puma shares jumped 17% in early trading and are now trading 8.7% higher, but are still near their lowest levels in a decade. The €3.2bn company has been struggling after losing ground to US rival Nike, Germany’s Adidas, and newer brands like the Swiss On Running.
Fila owner and Salomon backer Anta said it would use its expertise to help struggling Puma increase its sales in the lucrative Chinese market. The deal also helps Anta in its ambition to become a more global business.
The $27.8bn Hong Kong-listed sportswear company will pay €35 a share in cash to the Pinault family investment vehicle Artemis, which also controls Paris-listed luxury conglomerate Kering. The deal will help Artemis reduce its high debt burden.
Reuters was first to report the deal earlier this month.
European shares have risen modestly this morning, with banking stocks hitting an 18-month high.
Europe’s Stoxx 600 is up 0.2% with banks leading the way. A basket of bank stocks rose 1%.
In London, the FTSE 100 index has risen nearly 0.4%, or 36 points, to 10,184.
Germany’s Dax slipped 0.1%, France’s CAC is flat, Italy’s FTSE MiB gained 0.2% and Spain’s Ibex edged 0.1% higher.
In Asia, there were chunkier gains with Japan’s Nikkei up 0.85%, Hong Kong’s Hang Seng rising 1.35% and South Korea’s Kospi storming 3.4% ahead, reversing earlier losses – despite a new US tariff threat.
Accusing South Korea’s legislature of “not living up” to its trade deal with Washington, Donald Trump said last night he would increase tariffs on imports from Asia’s fourth-largest economy into the US to 25%.
Mohit Kumar, chief Europe economist at Jefferies, told Reuters:
The Greenland story is out of the way, that cleaned up positioning and now the market can focus back on fundamentals.
When we think about risky assets [like stocks] even Japan is a positive because that adds to fiscal expansion.
Trump’s threat to impose tariffs on several major European countries over Greenland jolted markets last week, but they bounced back on Thursday on relief that this had been avoided, dubbed the TACO trade (Trump Always Chickens Out).
Updated
Dr Martens shares tumble after sales drop
Dr Martens has reported a drop in quarterly sales as it scales back discounts and clearance activity, triggering a 12% fall in its share price.
The British bootmaker’s shares tumbled after it warned that revenues will be broadly flat this year as a result, making it the biggest faller on the FTSE 100 index.
The brand is in the middle of a major turnaround as it seeks to return to sustainable profit. It said it has made “good progress” in its strategy which should lead to improved profits this year.
However, the footwear maker, known for its black boots with distinctive yellow stitching, posted a 3.1% drop in revenues to £253m in the 13 weeks to 28 December, compared with a year earlier. The decline was driven by a 7% fall in sales directly to consumers, as it did less discounting on its own platform over the Christmas period.
Meanwhile, wholesale revenues jumped 9.3% in the quarter, with a shift towards wholesale in the UK and Germany.
The fashion brand told shareholders that it expects revenues on a constant current basis to be “broadly flat” this year as it prioritises profitability over revenue growth. It said it is “comfortable” with meeting its profit targets for the current financial year, pointing to “significant” pre-tax profit growth.
Dr Martens also expects a £15m impact from currency rates because of volatility, more than the previously flagged £10m.
Ije Nwokorie, the chief executive, said:
This is a year of pivot, as we make the necessary changes to our business to set us up for future sustainable growth. I remain laser focused on executing our new strategy and we will deliver all four of our strategic objectives for full-year 2026.
We have continued to improve the quality of our revenue through a disciplined approach to promotions and this represents a headwind to overall revenue, particularly in ecommerce.
The EMEA [Europe, Middle East and Africa] market continues to be challenging, with our direct-to-consumer revenue performance impacted by both the market and our more disciplined promotional stance. We delivered a good wholesale performance, with growth broad-based across all three regions.
The boot brand was originally created in 1945 by a young German army doctor, Klaus Märtens, who designed an air-cushioned sole to help his recovery from a broken foot.
They were introduced to the UK in 1960, with their sturdy design gaining popularity among postal delivery workers and factory staff before being embraced by skinheads and punks.
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‘The mother of all trade deals’: EU and India sign landmark trade agreement
India and the EU have finalised a landmark free trade agreement, which European Commission president Ursula von der Leyen hailed as the “mother of all deals”.
The agreement comes after almost two decades of on-off negotiations between India and the EU, which vastly accelerated in the past six months and were finally concluded late on Monday night.
The deal is expected to open up India’s vast and traditionally tightly guarded market to the 27 nations in the bloc, with a focus on manufacturing and the services sector. It is expected to ease market access for key European products, including cars and wine, in return for easier exports of textiles, gems and pharmaceuticals.
The agreement is expected to double EU exports to India by 2032 by eliminating or cutting tariffs in 96.6% of traded goods by value, and will lead to savings of €4bn (£3.5bn) in duties for European companies, the EU said.
“Europe and India are making history today,” von der Leyen said in a statement after landing in Delhi, where she met with the Indian prime minister, Narendra Modi, on Tuesday. “We have concluded the mother of all deals. We have created a free trade zone of two billion people, with both sides set to benefit.”
Von der Leyen had previously stated that she expected exports to India to double after the deal, with the EU granted unprecedented access to the previously heavily protected Indian market.
India, the world’s largest country with a population of 1.4 billion, is also one of the world’s fastest-growing economies and is on track to become its fourth-largest economy this year, according to International Monetary Fund.
JLR sales fall 25% in December as it makes just one Jaguar
In Europe as a whole, taking in the EU, European free trade area and the UK, car sales grew by 7.6% to 1.2m vehicles in December, and by 2.4% to 13.3m cars in 2025, according to those industry figures from the ACEA.
Jaguar Land Rover, which is still recovering from a crippling cyber attack in September that halted production for weeks, posted a 25.3% fall in sales in December sales to 4,332. Over 2025, sales were down 17% to 53,161.
The carmaker, owned by India’s Tata Motors, sold only one Jaguar in December compared with 372 a year earlier. The rest of its sales came from Land Rover.
At Solihull, the last Jaguar F-PACE rolled off the line on 19 December – the last Jaguar with an internal combustion engine ever built, as the brand steps into the electric era.
The factory shutdown following the cyber attack pushed the company from profit into a quarterly loss of almost £500m in the three months to 30 September. The hack has been estimated to have cost the wider UK economy up to £1.9bn, and was blamed by the government for dragging down the quarterly GDP growth figures.
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Introduction: EU car sales grow 1.8% in 2025 with electric cars surging while Tesla loses market share
Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy.
Sales of new cars in the European Union rose by 1.8% last year, with electric cars making up a bigger share of the market, while Tesla sales plummeted as it lost ground to China’s BYD.
However, overall car volumes remain well below pre-pandemic levels, the European Automobile Manufacturers’ Association (ACEA) cautioned. EU car sales rose by 5.8% to 963,319 vehicles in December and by 1.8% to 10.8m in 2025 versus 2024.
More people are switching to electric cars: Nearly 1.9m battery-electric cars were registered which made up 17.4% of sales, up from 13.6% a year earlier. Hybrid electric cars remain the most popular choice among European consumers, accounting for 34.5% of the market. Meanwhile, the combined market share of petrol and diesel fell to 35.5% from 45.2%.
The four largest markets in the EU, which together account for 62% of battery electric car sales, saw growth: Germany (+43.2%), the Netherlands (+18.1%), Belgium (+12.6%), and France (+12.5%).
By the end of 2025, petrol car sales were down by 18.7%. France experienced the steepest drop, with registrations plummeting by 32%, followed by Germany (-21.6%), Italy (-18.2%), and Spain (-16%).
In December, battery-electric car sales in the EU surged by 51% while plug-in hybrid electric cars jumped 36.7% and hybrid electric vehicles recorded a 5.8% increase.
Tesla sales fell by 31.9% in December to 21,485, taking its market share to 2.2% from 3.5%. Over the year as a whole, sales were down 37.9% to 150,504 vehicles.
The US company run by Elon Musk lost share to China’s BYD, whose sales nearly tripled in December to 18,008, more than doubling its market share to 1.9% from 0.7%. In 2025, BYD more than tripled sales to 128,827.
Shenzhen-based BYD overtook Tesla as the world’s largest electric carmaker in 2025, after Donald Trump withdrew electric vehicle subsidies and emissions regulations that incentivised electric car production. Tesla also faced a backlash from some consumers after Musk’s embrace of far-right politics at the end of 2024.
In financial markets, gold continues its historic rally, rising 1.5% this morning to $5,091.64 an ounce (spot gold).
There may be exciting news for pubs later today: the UK chancellor, Rachel Reeves, is expected to unveil a support package worth around £100m a year for the struggling sector, after being warned of widespread closures and job losses following controversial changes to business rates in the budget.
The chancellor is expected to announce the relief package on Tuesday, after officials admitted that they had not foreseen the total financial impact of the rates shake-up in England and Wales announced in the budget in late November.
The Agenda
11.30am GMT: Rachel Reeves in Treasury questions
1.15pm GMT US ADP Employment change
3pm GMMT: US Conference Board Consumer confidence for January
5pm GMT: European Central Bank president Christine Lagarde speech
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