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Motor Finance Scandal Could Cost Lenders Up to £30 Billion, Warns Moody’s

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A growing scandal over mis-sold motor finance could result in compensation bills of up to £30 billion for lenders, according to a warning from credit rating agency Moody’s. This latest estimate raises concerns that the issue could rival the scale of the payment protection insurance (PPI) scandal, which ultimately cost UK firms around £50 billion in redress.

The impact of the scandal may be more severe for smaller, specialist lenders, such as Close Brothers, Aldermore, Investec, and the financing arms of Ford and Volkswagen. While larger banks like Lloyds Banking Group, Barclays, and Santander UK may be better positioned to absorb the costs, Moody’s cautioned that these smaller institutions could face a “more significant hit to earnings and capitalisation.”

The motor finance industry has been under growing scrutiny since the Financial Conduct Authority (FCA) banned discretionary commissions in car loan deals in early 2021. These commissions, paid by lenders to car dealers or credit brokers for arranging finance, were seen as unfair, as they incentivised higher interest rates for borrowers.

The ban followed increasing consumer complaints about the commissions, leading the FCA to launch a comprehensive review in January, examining such payments dating back to April 2007. The ongoing investigation has prompted speculation that the regulator may soon require car loan providers to compensate affected borrowers.

In July, the FCA indicated that compensation for mis-sold finance was now “more likely than when we started our review.” Moody’s estimates the potential compensation costs could range from £8 billion to £21 billion for the industry.

The situation worsened last month following a Court of Appeal ruling, which determined that any undisclosed commission paid to a borrower was unlawful, making lenders liable to repay the money. This ruling applies to all types of commission, not just discretionary payments, and could add up to £9 billion to the compensation bill.

The judgment has caused turmoil in the industry, with some lenders halting car loan operations to ensure compliance. Close Brothers and Aldermore, central to the ruling, are planning to appeal to the Supreme Court. Meanwhile, Santander UK has delayed its third-quarter results to assess the financial impact of the judgment, with figures expected to be released Wednesday.

Uncertainty surrounds the scope of the ruling, with speculation that it could extend to other forms of consumer finance, which would amplify the potential fallout for lenders. Moody’s warned that a broader application of the judgment could have a “significantly more negative impact.”

So far, most banks and car finance arms have not set aside funds to cover potential compensation, with Lloyds Banking Group being one of the few to make provisions, earmarking £450 million. The scale of potential compensation payments has raised concerns about the stability of smaller lenders and the wider impact on the UK’s financial sector.

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Amazon MGM Takes Creative Reins of James Bond Franchise Amid Casting Buzz

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In a landmark shift for the James Bond franchise, Amazon MGM has partnered with long-time producers Michael G. Wilson and Barbara Broccoli to oversee the future of 007. While all three entities retain co-ownership of the Bond intellectual property, Amazon MGM will now lead creative decisions, marking a significant departure from its previously limited role.

The move follows Amazon’s $8.5 billion acquisition of MGM in 2021, which granted it partial ownership but little say in the franchise’s artistic direction. With Daniel Craig’s departure after 2021’s No Time to Die, speculation about the next James Bond has intensified. Jeff Bezos, Amazon’s founder and executive chairman, fueled the debate by asking his followers on social media platform X, “Who’d you pick as the next Bond?” The overwhelming response highlighted British actor Henry Cavill as a fan favorite. Known for roles in Superman, The Witcher, and Mission: Impossible – Fallout, Cavill previously auditioned for the role in 2006’s Casino Royale but lost to Daniel Craig. Director Martin Campbell praised Cavill’s audition but deemed him too young at the time. Now in his early forties, Cavill’s age could be a factor if long-term commitments are considered.

Daniel Craig acknowledged Wilson and Broccoli’s contributions, telling Variety, “My respect, admiration, and love for Barbara and Michael remain constant and undiminished.” With Wilson stepping back and Broccoli expected to reduce her involvement, Amazon MGM gains greater creative control, raising questions about the franchise’s future direction.

Fan speculation continues to swirl around Cavill, alongside other contenders like Taron Egerton, Tom Hardy, and Idris Elba. While Amazon MGM has yet to announce a timeline or reveal casting decisions, industry watchers anticipate a new era that may extend beyond traditional films, potentially including spin-offs, series, and streaming exclusives. As the studio reshapes Bond’s future, audiences worldwide eagerly await the next chapter in the iconic spy saga.

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Global Hiring Slump Marks Longest Downturn in Decades, Says Hays CEO

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The global job market is experiencing its longest downturn in over 20 years, according to Dirk Hahn, CEO of Hays, Britain’s largest listed recruitment firm. Hahn attributes the slump to ongoing macroeconomic uncertainty, which is deterring both employers and job seekers from making moves.

Hays, which employs nearly 7,000 consultants worldwide, reported weaker demand for temporary workers in early 2025, while demand for permanent roles—particularly in Europe—remains sluggish following a pre-Christmas dip. Countries such as France, the UK, Ireland, and Germany, Hays’s largest market, are feeling the pressure most acutely.

In the six months leading up to December, Hays reported a 15% drop in group net fees, falling to £496 million from £583.3 million the previous year. Pre-tax profits fell sharply by 67% to £9.1 million, compared to £27.6 million during the same period the prior year. Hays’s share price, already down 25% over the past year, dipped a further 1.8% on Thursday, closing at 71¾p and placing the company’s market value just below £1.2 billion. Despite declining profits, the company will maintain its interim dividend at 0.95p per share.

While the broader UK labor market has shown resilience with limited mass layoffs, businesses remain cautious about expanding their workforce. “Most companies have enough work to retain their current staff, but they’re not looking to increase headcount,” said James Hilton, Hays’s chief financial officer. “Many employees who received pay increases in recent years are not seeking new roles, creating a stalemate. However, over time, people will seek promotions or fresh challenges.”

Recruiters had anticipated a market recovery earlier this year, but Hahn now warns that the rebound may not materialize until 2026. In the meantime, Hays is focusing on its technology recruitment division—its most profitable segment—as it navigates the prolonged global hiring slowdown.

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UK Government Reports Lower-Than-Expected Budget Surplus in January

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The UK government reported a budget surplus of £15.4 billion in January, falling short of economists’ forecasts of £21 billion and the £19 billion predicted by the Office for Budget Responsibility (OBR). Despite January typically seeing a boost from self-assessment tax payments, the lower-than-expected figure has increased total borrowing for the financial year to £118.2 billion—over £11 billion more than the previous year.

The government’s debt-to-GDP ratio now stands at 95.3 per cent, a level last observed in the 1960s. With the OBR set to release updated forecasts on March 26, there are concerns that the government may struggle to meet its goal of reducing the debt ratio by 2029. This could lead to potential spending cuts or tax hikes in the autumn budget.

Reduced debt-servicing costs helped boost January’s surplus, dropping from £9 billion in December to £6.5 billion. However, this was partially offset by a £6 billion one-off expense related to the government’s repurchase of military housing from private firm Annington.

Darren Jones, chief secretary to the Treasury, emphasized the government’s commitment to “economic stability and meeting our non-negotiable fiscal rules.” He also noted that a comprehensive spending review—the first of its kind in 17 years—is underway to ensure that public funds are used efficiently and aligned with national priorities.

 

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