New car sales tumbled 12.2pc in October, marking the seventh consecutive month of declines and an acceleration on the fall of 9pc recorded the previous month.

Falling business and consumer confidence was to blame for the drop, according to Mike Hawes, chief executive of trade body the Society of Motor Manufacturers and Traders.

“This is being compounded by confusion over Government policy on diesel,” he said. “Consumers need urgent reassurance that the latest, low emission diesel cars on sale will not face any bans, charges or other restrictions, anywhere in the UK.”

The Government said earlier this year it would aim to end sales of conventional diesel and petrol cars by 2040, while ministers are said to be drawing up plans to tax diesel cars more heavily in towns and increase duty on the fuel.

Demand for diesel vehicles plunged 29.9pc in October as a result. The slump in the diesel market was so severe it could not be offset by a 2.7pc rise in demand for petrol cars and a 36.9pc jump in sales of alternatively fuelled vehicles, such as electric cars and hybrids, to 8,244 registrations.

In total, new car registrations - a proxy for sales - fell to 158,192 in October, the SMMT reported.