Car production increased in October thanks to rising exports making up for falling UK demand, new figures from the Society of Motor Manufacturers and Traders revel.

More than 157,000 cars rolled off production lines last month, 3.5% more than the October 2016, while exports have increased by 5%, with more than 1.1 million cars built for overseas markets this year so far.

However, domestic demand fell by 2.9%.

Four out of five UK-built cars were shipped abroad last month, with most going to other European countries. Forecasters predict 1.73 million cars will be built in the UK this year, a revised figure down from 1.8 million.

"It's encouraging to see positive growth in exports this month and a slight increase in overall output,” said SMMT Chief executive Mike Hawew.

"Production for British consumers, however, has continued to fall as domestic demand for new cars decreased for the ninth month this year amidst continued uncertainty over both Brexit and the Government's air quality plans.

"It's important that confidence is restored to the new car market, as sales of the latest cleaner, greener cars not only address air quality concerns but speed up activity on factory lines across the UK. The latest independent UK forecast report is worrying news for the sector, predicting annual output which is, at best, static compared with last year.

"The industry needs stability and a clear roadmap for Brexit if we are to encourage investment and arrest the decline in both the market and business confidence."