In 2018, new vehicle sales in the United Kingdom fell by their biggest rate since the global financial crisis, a decade ago, due to a weaker economy and a raft of regulatory changes, an industry lobby group said on Monday.

The Society of Motor Manufacturers and Traders said the new car market was down 6.8 per cent from the year before at 2.37 million units. This is the biggest decline since 2008 when Britain sank into a deep recession amid the financial crisis.

"A second year of substantial decline is a major concern, as falling consumer confidence, confusing fiscal and policy messages and shortages due to regulatory changes have combined to create a highly turbulent market," said Mike Hawes, the group's chief executive.

"The industry is facing ever-tougher environmental targets against a backdrop of political and economic uncertainty that is weakening demand so these figures should act as a wake-up call for policymakers," Hawes added.

The past year has been challenging for the auto industry. Though unemployment is low, many consumers have held off big purchases due to higher inflation, while questions have grown over how the government might regulate diesel cars.

Brexit uncertainty, meanwhile, has clouded the outlook across the economy.

There are concerns among analysts that 2019 could see the economy slow more sharply if Britain crashes out of the European Union on March 29 without a deal on future relations.

"Even allowing for uncertainty over government policy on diesel cars affecting fleet sales, it appears that several businesses have been reluctant to replace or add to their fleets amid a cloudy economic outlook fueled by Brexit uncertainties," said Howard Archer, chief economic adviser to the EY ITEM Club, a forecasting group.

The UK parliament is due to vote next week on the deal Prime Minister Theresa May agreed on with the EU, but as things stand she will likely struggle to win enough support.

What would happen if she loses the vote is unclear.

Some lawmakers back another Brexit referendum while others think the country would be fine leaving the EU with no deal after some initial turbulence.

Both the EU and Britain have stepped up preparations for a possible "no-deal" Brexit.

The outlook for the car market and the wider British economy will depend on what happens in the weeks ahead.

"We expect car sales to continue to drag modestly on growth in consumers' spending in the first half of this year, with the outlook further ahead hinging on the Brexit path chosen by lawmakers," said Samuel Tombs, chief UK economist at Pantheon Macroeconomics.