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The UK economy has many challenges to tackle in this coming financial year. The city regulator, Financial Conduct Authority (FCA) has advised financial firms to take steps in the right direction to minimise the impact of Brexit, PPI compensation and high cost credit. These challenges are quite critical in nature, failing to tackle them can put the nation under tremendous stress but handling them efficiently can turn around the landscape of the Britain economy.

High Cost Credit

The crisis of 2009 had taken place mostly due to the fact that the general population and corporations had taken loans which they could not pay back. This is a major concern not only in the USA but also in other developed nations such as the UK, Germany, and Japan etc. Due to this the Financial Conduct Authority has put in place a mechanism that helps banks figure out the affordability of loans before giving them away. Financial firms have been advised to not grant loans to individuals or companies that are found to be financially incapable of repaying them. This can help the economy avoid a lot of bad debt.

Brexit

The impact of Brexit on the UK economy is yet to be completely measured. While the government seems to be unusually optimistic about the prospects of UK economy post Brexit, the opposition has a different tale to tell. They believe it can have a negative impact on the way trade takes place, employment opportunities and foreign investment.  According to some economics experts, Brexit will leave the UK with more resources as they will no longer be obliged to share them with other EU countries. From the perspective of security the Brexit will allow the UK to have better control over its border and immigration.

PPI Compensation

About £28bn has already been paid out to consumers who had been seeking PPI compensation. According to the estimates approximately another £30bn may need to be set aside to settle all the PPI cases. Needless to say when banks are paying out such huge sums of money to people it is bound to place a dent on the economy. It is not just the basic amount that they need to compensate for, in cases where PPI had been wrongly sold to consumers in the late 90’s and early 2000’s, they are also required to pay interest on the basic amount.

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