The 40% tax payer owned Lloyds Banking Group has
announced that they have set aside a further £700 million to cover additional
compensation they must pay out for PPI claims.
This will take the total compensation payouts across the
banking sector for PPI claims to a staggering £18 billion pounds. To put this
into perspective, this is twice the cost of the Olympics. That's scary.
Now I could spend the next fortnight slamming the
morality and ethics (lack of clearly) of the banking sector......but here's my
controversially positive take on things......
The basic reality is that the UK economy has had an £18
billion injection of 'free' cash distributed to consumers. And here is the
crucial thing......there is now sufficient confidence for the population to
spend it.
We are a consumer driven economy and our economic
prosperity is based on the population spending money......this readily
available £18 billion has brought us cash to spend.
The evidence in some sectors is staggering. Car sales are
up 16% in the last year. Mortgage approvals are at their highest levels for 3
years. House sales are at a 5 year high.
Now I appreciate we have a long way to go to get
prosperity back to pre Northern Rock times (can't believe that is 5 years ago)
but a corner is being turned.
Lots of winners on the back of the banks being the loser!
And one final key point......do not let the political
parties spin you into believing that this was down to their policies......it is
purely down to the banks paying for their morality failings.
Long way to go but it is definitely a start.
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