Following the banking crisis in 2009, City bonuses in London have taken a dramatic downturn and forecasters are predicting that they’ll stay well below their 2007 peak. In the last 12 months, workers in the Square Mile have seen their bonus payouts shrink by some 8%.
However, it would seem that while banks are putting on a public show of succumbing to public pressure over vast bonuses, they are increasing permanent salaries that more than make up for workers’ apparent losses. According to a report from CEBR, the average regular pay for City workers in Q1 of 2011 is about 7% higher than a year ago and much higher than the 2% growth that the rest of the UK has seen. In other words, lower bonuses have not put an end to the prevailing culture of high remuneration in the City.
As Scott Corfe, CEBR economist says, “City workers are not earning less – their earnings are merely becoming less bonus-driven as basic pay continues to grow much faster than across other parts of the economy.”
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