How PPI boosted the economy
Alexander Burgess is a director of British Money
News that the UK car production industry has grown by 3.1%, reaching its highest level since 2007, has led some commentators to suggest the peak is due to PPI compensation payments.
Over 1.5 million cars were made last year – one every 20 seconds – and the Society of Motor Manufacturers and Traders predicts the UK by 2017 will become Europe’s third biggest car manufacturer, behind Germany and Spain.
The general consensus is that PPI compensation payments provided the money needed for deposits, as consumers tire of scrimping and saving, and that the £16bn set aside by lenders provides an economic boost of around 1% GDP.
If this is indeed the case, and one of the reasons why the UK recovery in Q4 2013 appeared faster than elsewhere, there is at least a positive to take from the mis-selling scandal.
Whilst lenders’ cannot rebuild their reputations overnight, suggestions they may be contributing to our economic growth can only be seen as a benefit.