Bank payouts spell happy Christmas

Compensation payouts following widespread insurance mis-selling scandals will help boost high street spending in the run-up to Christmas to £88.4bn, analysts say.

The forecast of a 2.2 per cent rise in retail spending during the last three months of the year is attributed to improving consumer confidence as well as one-off factors such as pay-outs over payment protection insurance (PPI).

Banks have been forced to set aside billions to compensate customers who may have been sold PPI products they did not need, and according to Verdict analysts it i will help consumers feel more confident about spending.

Another is the Royal Mail share flotation – which has already seen nearly 700,000 ordinary retail investors see the value of their stakes rise by hundreds of pounds.

The rise predicted by Verdict represents an extra £1.95bn for retailers to fight over in the run-up to Christmas.

“Consumer confidence drives spending and shoppers have far more reasons to be cheerful this year,” the analysts said.