The biggest financial stories of 2011
Well, 2011 was quite the memorable year for the financial sector with crises all over the globe, from the US’s downgrade woes to Greece teetering on the brink of a default. Closer to home, Britain’s banks paid out millions in mis-sold Payment Protection Insurance (PPI) compensation and the revenue revealed further mistakes in its tax collection. Will 2012 be a quieter year? We can only wait and see.
• The US loses its ‘AAA’ credit rating from Standard and Poor’s
August saw the United States lose its prized ‘AAA’, top-notch credit rating from one of the big three ratings agencies Standard and Poor’s. In December, both the other two agencies, Moody’s and Fitch, threatened possible downgrades unless the country takes action to tackle its debt.
• Japan suffers a devastating earthquake and tsunami
On the 11th March, Japan was hit by a huge earthquake and subsequent tsunami, with thousands losing their lives in the immediate disaster and in the aftershocks. Damage was also caused to the Fukushima nuclear reactor.
• More HMRC tax blunders revealed
After mistakes by HMRC, leading to millions either under or overpaying tax, were brought to light in 2010, 2011 saw further errors revealed. The errors mean that HMRC owe some customers an average of £400 each, while other, arguably less fortunate customers owe an average of £600 each to HMRC.
Source: This is Money
• Public sector workers strike over pension changes
Thousands of workers in the public sector went on strike on November 30th, leading to two thirds of schools in Britain being closed and operations postponed. 2 million people went on strike, unions estimated with tens of thousands joining rallies.
Source: BBC News
• Southern Cross Healthcare ceases trading
Southern Cross Healthcare, the largest provider of private care homes, ceased to be a company in December of 2011 after the last two care homes it operated were transferred. They ran 752 care facilities and looked after 31,000 people, most of whom were elderly.
Source: The Northern Echo
• Greek debt and the possibility of a default
The situation in Greece, where its debt grew to 150% of its national income, became more prominent with the replacing of its Prime Minister and riots on the streets of Athens. The question still remains whether Greece will end up having to leave the Euro.
• Huge PPI Claims Payouts by UK Banks
Britain’s banks paid out £557 million in PPI claims in the first 6 months of 2011 alone. The Financial Ombudsman Service upheld 9 out of 10 complaints, with payouts ranging from £200 to £10,000.