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UK car production ramps up in July, still down 21% on year

LONDON, Aug 27 (Reuters) - British car production rose sharply in July but is still well below last year's level after manufacturing almost completely stopped in April at the start of the coronavirus lockdown, industry figures showed on Thursday.

A total of 85,696 cars were manufactured in Britain in July, 51% more than in June but 21% fewer than in July last year, the Society of Motor Manufacturers and Traders (SMMT) said.

"As key global markets continue to reopen and UK car plants gradually get back to business, these figures are a marked improvement on the previous three months, but the outlook remains deeply uncertain," said SMMT chief executive Mike Hawes.

Britain's economy shrank by a record 20.4% in the second quarter of 2020, the most of any major economy, and official figures showed the transport equipment sector was the hardest hit area of manufacturing, with output down by almost half.

The SMMT said car production in the first six months of this year was the lowest since 1954.

The sector is now bouncing back strongly, following the rebound in other parts of the economy such retail sales, which are now higher than before the pandemic.

But the SMMT warned that uncertainty about Britain's future trading arrangements with the European Union risked derailing the recovery.

Britain's temporary post-Brexit transition arrangement expires at the end of this year, and no replacement is close to being agreed.

"The impact of tariffs on the sector and the hundreds of thousands of livelihoods it supports would be devastating, so we need negotiators on both sides to pull out all the stops," Hawes said.

Around 80% of cars made in Britain are exported and most use parts imported from elsewhere in Europe. (Reporting by David Milliken; editing by Stephen Addison)