How far did PPI go in masking the recession?

grizzly1911

The overall effect is could well be neutral but the timing of the flows and the choice of what their money is/was spent on will be different perhaps.

It is not necessarily bankers that have "suffered" but shareholders who have seen dividends dissapear along with capital loss.

Interestingly a high proportion are being "rented" on PCP the PPI will only have helped with the initial deposit and moved vehicles at high prices. Will be interesting what a glut of vehicles in x years will do to residuals.

purch

shortchanged wrote: »

I would assume most sensible people have put the money away for a rainy day. :whistle:

Most "sensible" people wouldn't have been scammed into buying PPI in the first place, so didn't need a payout to recompense them for their stupidity

Generali

purch wrote: »

Most "sensible" people wouldn't have been scammed into buying PPI in the first place, so didn't need a payout to recompense them for their stupidity

I got a credit card for stoozing. Specifically said that I didn't want PPI. They put it on anyway and refused to refund the one month's payment.

I called the people in the bank some very unkind words. I was too lazy to sue though.

Blacklight

I heard Peston preaching his lefty views on the way the economy has suddenly picked up on R4 yesterday. It seems some people can't accept plan A worked and are having a hard time without any doom and gloom to report.

The biggest point that appears to have been completely overlooked is that 12bn is what the banks have COMMITTED in terms of the issue, not what has been PAID OUT and then SPENT.

MFW_ASAP

I would have thought that the banks having to put aside so many millions/billions to cover PPI claims (regardless of whether this money was all claimed) would have had a detrimental effect on the economy, rather than a positive one.

Loughton_Monkey

Blacklight wrote: »

I heard Peston preaching his lefty views on the way the economy has suddenly picked up on R4 yesterday. It seems some people can't accept plan A worked and are having a hard time without any doom and gloom to report.

The biggest point that appears to have been completely overlooked is that 12bn is what the banks have COMMITTED in terms of the issue, not what has been PAID OUT and then SPENT.

I've never had Peston down as a lefty. Personally, I get the impression that he just has a large chip on his shoulder. Possibly he wanted to be a banker, rolling it in on 7-figure bonuses. Instead, however, he's ended up working as a mere overpaid 'correspondent' albeit for a Lefty Corporation. But he earns far less than a banker.

wotsthat

Graham_Devon wrote: »

So how far will this have gone in "masking" the hardship that would otherwise have been inevitable? And what happens now that the PPI taps are being turned off?

If it hadn't been for that pesky PPI boosting the economy you might have had your 'tripple' dip.

Can't see how it's masked any hardship unless you're picturing the average recipient as someone that is spending the money slowly to eke out their gruel supplies.

The reality is that £bn's going into the economy will boost GDP but it would have done that anyway using a vehicle other than PPI such as dividends or bonuses. Maybe a larger % is spent and more quickly using the PPI method but the net effect can't be dissimilar.

Mallotum_X

chewmylegoff wrote: »

PPI claims just moved money from one part of the economy to another. If banks hadn't paid it out to PPI claimants they would have just paid larger dividends and bonuses to different people who would then have done other stuff with it. At a macro level I doubt it made any difference to anything.

Perhaps but I wonder if the typical PPI payout receiver and typical bank shareholder are different groups with possibly different spending habits.

I would assume (and this may be wrong) that one group has in general a lower income level and may be more tempted to splash out than the other who may be more likely to save/invest.

chewmylegoff

Blacklight wrote: »

I heard Peston preaching his lefty views on the way the economy has suddenly picked up on R4 yesterday. It seems some people can't accept plan A worked and are having a hard time without any doom and gloom to report.

The biggest point that appears to have been completely overlooked is that 12bn is what the banks have COMMITTED in terms of the issue, not what has been PAID OUT and then SPENT.

Actually more than 12bn has already been paid out - that threshold being crossed in August last year.

http://www.fca.org.uk/consumers/financial-services-products/insurance/payment-protection-insurance/refunds