THE UPCOMING bonus season is set to be the worst in over a decade, according to figures out today – with City payouts set to collapse even further in the next five years.
London has also now fallen behind New York and is about to be overtaken by Hong Kong in terms of the number of City-style jobs in finance and professional services, according to dramatic research from the Centre for Economics and Business Research (CEBR).
New York boasted 254,102 City-style jobs in 2012, against 249,512 for London. By 2015, when London will have fallen to third place for the first time, New York will boast 249,746; Hong Kong 247,912; London 237,134; and Singapore 182,266, a record high for the Asian City-state.
London’s bonus pool for 2013 is set to come in at £1.585bn, down 64 per cent on the £4.402bn for 2012 and 86 per cent below its £11.38bn peak in 2008, the CEBR estimates.
Chief Douglas McWilliams said: “Taking into account the loss of income from a much smaller City, from lower corporation tax, stamp duty and other city based taxes, I estimate that government revenues from the City in the current financial year are likely to be about £40bn compared with the £70bn which it received in 2007-8.”
London lost its position as the world’s number one finance centre this year as job losses left New York as the largest employer, while Hong Kong is expanding rapidly and is set to overtake the City by 2015.
The collapse in bonuses reflects a trough in City activity – equities trading fell 20 per cent by value on the year, while gilts trading is down 33 per cent and UK merger and acquisition levels fell by one third.
But the CEBR also believes firms are increasing salaries and chopping bonuses as they fear a public backlash from large bonus payouts.
Meanwhile downbeat business survey data for Lloyds Banking Group suggest the capital’s economy could be slowing further.