WIREDGOV

City bonuses to fall in 2011/12 to just a third of levels seen pre-recession, at “only” £4.2 billion,

Total bonus payouts in the City for 2011/12 are expected to fall year on year by 38.0% to “only” £4.2 billion. This takes the level of bonus payments to just over a third of the £11.6 billion peak seen in 2007/08 just before the recession. The last time a lower level of bonuses paid was in 2002/03.

These are the key findings of updated research into the City economy by the Centre for Economics and Business Research (Cebr).

Bonuses are projected to be significantly lower in the 2011/12 financial year due to the much weaker City economy.  Turmoil caused by the debt crisis in the Eurozone has constrained activity in the City, and several major banks have announced weak results for Q3 2011.

Up to 27,000 City-type jobs are expected to be lost over 2011 as a whole and remain broadly at that level in 2012, and the prospect of tighter regulation is placing further downward pressure on activity.  The recent trend of remunerating workers through higher salaries and lower bonuses plays a part in both the downward movement in total bonuses and the loss of now more expensive employees.

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