|
Shares in car finance providers shot up on Tuesday after a report suggested Chancellor Rachel Reeves could intervene to protect lenders. The Financial Times said the Treasury has taken the unusual step of seeking permission to intervene in a forthcoming Supreme Court case, amid concerns that banks and other lenders could face a compensation bill costing tens of billions of pounds. In response, shares in Close Brothers Group PLC surged 19% to 290.64 pence each in London on Tuesday. Lloyds Banking Group PLC rose 4.9% to 61.52p and Barclays PLC by 1.5% to 296.10p. S&U PLC shares were up 7.5% to 1,569.30p. Reeves fears that the case could cause chaos in the motor finance and car industry, making it harder for consumers to get loans. About 80% of new vehicles in the UK are bought on finance. Reeves fears the huge potential payouts would have a chilling effect on the banking sector, stunt growth and damage the country‘s pro-business reputation, the FT said. In April, the Supreme Court is due to hear an appeal brought by car loan providers challenging an October ruling from the Court of Appeal that sided with consumers who complained about ‘secret’ commissions on car loans. The judgment ruled that it was unlawful for banks to pay a commission to a car dealer without the customer’s informed consent. In a submission to the Supreme Court, seen by the FT, the Treasury claims the case has ‘potential to cause considerable economic harm and could impact the availability and cost of motor finance for consumers’. The Treasury application said that the case might ‘generate a perception that regulation in the UK is uncertain’. Copyright 2025 Alliance News Ltd. All Rights Reserved.
|
