City Bonuses to Fall by 48%, Says Cebr

Bonus payouts are expected to fall by 48 percent to £2.3bn, year-on-year, according to the latest data from The Centre for Economics and Business Research (Cebr).

The figures are the lowest over a decade for London's financial service workers. It was in 1998 that the bonuses touched the £2.5bn mark.

According to Cebr, bonuses for the 2011/12 are expected to be at £4.4bn which was on the peak in 2007/08 with a record £11.6bn.

The new figures on the bonus payouts for the City of London workers released by the economic think tank attributed the decline to the sluggish labour market and the fall in the City jobs due to the financial crisis and shareholder backlash on hefty payouts.

"City remuneration levels are coming back into the real world. Employees are being told, Your job is your bonus so doesn't expect a large sum in addition," said Douglas McWilliams, chief executive of Cebr.

Recently, shareholder pressure toppled the high profile chief executives of three companies -
Andrew Moss of Aviva, David Brennan of AstraZeneca and Sly Bailey at Trinity Mirror.

The trend may affect public sector services, though it would be welcome news for anti-City campaigners, opined McWilliams.

"Before anti-City campaigners start jumping for joy, they should reflect on the fact that because City earnings are very highly taxed, the biggest loser of all will be the Treasury, meaning fewer funds available to finance public services," McWilliams said.