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FSA priority switches from dealers to the City

The Financial Services Authority, which is cracking down on car dealers who fail to conform to its rules on selling finance and insurance products, is to investigate aspects of last month’s financial turmoil.

Prime Minister Gordon Brown said global action on regulation was needed, but the FSA was looking at possible curbs. 

“We are a pro-business government, we are pro-market. But it will help business best if we can clean up what went wrong,” he said.Chancellor Alistair Darling called on banks to “behave responsibly”. He also pledged action over weaknesses in the financial system, promising to take measured decisions for long-term stability. 

Inflation has risen to 4.7%, close to the 5% peak forecast by the Bank of England. 

NFDA director Sue Robinson and many other business people have called for a cut in interest rates from the current 5% to stimulate spending.

Many experienced automotive executives said before the turmoil that new car sales were unlikely to recover before late next year or early 2010.

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