The UK may be bracing itself for an age of austerity but luxury cars are flying off the forecourts, car dealership Pendragon said today.

Investors showed some Christmas cheer today as the FTSE 100 Index gained more than 1%.

London’s FTSE 100 Index recorded its first positive finish in six sessions today after benefiting from a strong start to trading on Wall Street.

Rising interest rates claimed a major casualty today after car dealership Pendragon warned its profits would be hit by a consumer spending slowdown.

British car retailer Pendragon said today it was benefiting from its £500m (€747.9m) deal for Reg Vardy after it emerged profits jumped 51% last year.