One of the puzzles of the past year is how British consumers have managed to keep increasing their spending despite the continuing squeeze on their incomes and without further running down savings – rather the reverse.
Part of the explanation must be the rise in employment. If half a million more people are in some kind of job than the total a year earlier, that must add to consumption. Even if we don't feel any richer as individuals, there are more of us earning some money and accordingly able to do some spending.
There is, however, something else. I had not appreciated quite what a huge boost had come from payments from the banks for mis-selling insurance products. According to a note from Berenberg Bank, last year these amounted to 0.6 per cent of personal income, with the average payout being £3,000.
It was after these payments started to come through that personal car sales started to climb, making Britain the only major market in Europe last year where sales rose rather than fell. Increased car sales accounted for half the increase in consumption last year.
Leaving aside the details of the morality of the whole thing, there is a certain rough justice that thanks to the past sins of the banks, battered British car buyers are replacing their old bangers with new, fuel-efficient vehicles.
For the moment at least car sales remain strong. But all things come to an end, even compensation payments, and we all have to hope that when this whole business is finally settled, something else will have come along to help the car market.