Why hasn't QE caused inflation?

Thrugelmir

theEnd wrote: »

PPI compensation?

I know a few people who ended up with £10k+. One with £25k+. All now spent.

Eventually it will end. Then what is the question?

Graham_Devon

25k in PPI compensation?! Largest I'd heard of was 11k and I thought then that would have taken some serious debt!

theEnd

I've no idea how, but not a person who would exaggerate.

They've bought 2 cars and 2 horses and all sorts of stuff. They could have bought their council house.

tincans

Thrugelmir wrote: »

Without the benefit of £25 billion of PPI compensation the UK economy may well be in the same place as Europe now. /QUOTE]





Its not £25 billion - its about £16bn so far.

see here;

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


That's over 3 1/2 years - its not nearly enough to explain the difference between UK and 'slow' Europe - although it has clearly acted as a boost to growth.

Thrugelmir

tincans wrote: »

Its not £25 billion - its about £16bn so far.

After the latest half yearly bank results this is in rounded numbers what the total provision for PPI amount to.

I agree a provision isn't physical cash. So there's yet more on it's way into the economy. Consumer spending has been a big driver of UK recovery.

How do you compare the whole of Europe to the UK in any meaningful way? Particularly as EU member states are having to adhere to the Stability and Growth Pact. Something which the UK would fail on, on all counts.

The UK continues to spend beyond it's means. We haven't had austerity in any meaningful sense. We appear to be kidding ourselves that's all rosy in the garden. Whoever wins the next general election has some difficult and possibly unpopular decisions to make.

wotsthat

Thrugelmir wrote: »

After the latest half yearly bank results this is in rounded numbers what the total provision for PPI amount to.

I agree a provision isn't physical cash. So there's yet more on it's way into the economy.

Isn't it just money that if it wasn't being paid in PPI would've have entered the economy via banker's bonuses and shareholder dividends? When PPI ends the flow of cash will just divert to different recipients.

I'd suggest the average PPI recipient and their money are very quickly parted but, other than the speed at which the cash is spent, the net cash positions might not be that different.

Thrugelmir

wotsthat wrote: »

Isn't it just money that if it wasn't being paid in PPI would've have entered the economy via banker's bonuses and shareholder dividends? When PPI ends the flow of cash will just divert to different recipients.

Banks operate internationally likewise so are shareholders so cash will flow outside of the UK. You'd have to look at UK operating profits in isolation to determine the impact. At it's peak HBOS barely made £10 billion total profits to put the PPI payouts in perspective.

PPI was a huge earner for the banks. Enabling cross subsidisation of products such as current accounts and mortgages. With every increasing regulatory costs being imposed on banks. Banks will have to earn their money elsewhere or contract in size.

prowla

When I go shopping and see the way prices have risen, I find that I simply do not agree with the inflation figures.

Southend1

prowla wrote: »

When I go shopping and see the way prices have risen, I find that I simply do not agree with the inflation figures.

My thought exactly. Day to day essentials have increased greatly while items like big TVs seem to be ridiculously cheap.

Thrugelmir

prowla wrote: »

When I go shopping and see the way prices have risen, I find that I simply do not agree with the inflation figures.

Or is a case that your earnings are no longer keeping up?

I've witnessed salaries for some jobs go back to levels approaching those of 15/20 years ago.