When looking at the global economy, it is important to remember that the GBP (Great British Pound) holds value regardless of the current economic stance. While Brexit may currently be wreaking havoc, the PPI deadline is also on the horizon and the world is watching.
The UK economy has been up and down for a number of years and with retail stores moving online and fewer people hitting the high street to shop, the economy is shifting. The PPI scandal and the amount paid out following its publicity has also had a dramatic effect on this. But just how much have PPI claims affected the economy? Ahead of the August 29th deadline we are looking into just how much the PPI scandal has had an impact globally.
How Has PPI Affected The UK Economy?
Five of the UK’s biggest banks have set aside over £32 billion since the PPI scandal began and most of this astronomical budget has already been claimed. Since 2011, there have been a large number of claims all receiving differing sums in compensation, but how does the effect the economy as a whole? Well, as people receive this cash from their PPI claims, they are spending it, both online and instore. This is great for the British economy, as this amounts to a 1% increase in the value of the Great British Pound. Although this seems small, this is a substantial impact that may have had a profound effect, especially during the financial instability caused by the looming Brexit deadline.
In addition to this, this has boosted the housing market as some of those who receive repayments from PPI claims are choosing to invest their lump sum in property. This is particularly beneficial if you are a first-time buyer, as a PPI claim can help you to get your foot on the property ladder far more quickly than first anticipated.
How Does This Affect The Global Economy?
But how does this affect the economy globally? When people are travelling to the UK on their holiday, the tourism industry benefits as they come and spend disposable income. What’s more, the higher the value of the pound, the more value for money local businesses will receive when converting money into a different currency. This is great for holidaymakers, as they are able to get a couple of extra dollars here and there for their own summer holiday.
Another benefit for the economy globally is the business aspect. With the 1% increase in GBP value, this is something that can deter companies from withdrawing from the UK during these uncertain times. This is potentially beneficial for trading, as better deals are likely to be created due to the value of our currency being raised – provided Brexit doesn’t make this difficult.
Regardless of the effect Brexit and PPI could have in the future, there is simply no denying that it has had an effect thus far. With the UK’s PPI claims deadline approaching on the 29th August this year, only time will tell as to just how far this effect can stretch.