City bonuses tumble as price rises keep outstripping wages

 
Tim Wallace
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FINANCIAL services workers saw weekly pay fall in January as bonuses came in far lower than last year, data showed yesterday.

Wages in the industry fell to an average of £592 per week, down one per cent on the same month of 2011 figures from the Office for National Statistics (ONS) revealed.

January was the first month of this year’s bonus season in which the cash was paid out, and they were down 22.8 per cent on the same month last year.

Wage growth in the private sector fell from 2.2 per cent to 1.7 per cent, while in the government sector it fell from 1.7 per cent to 1.3 per cent.

The small rises in pay are well below the rate of change in consumer prices, which rose 3.6 per cent in the year to January, and retail prices which rose 3.9 per cent.

Continued high prices are likely to impact on the wider economy, economists warned.

“Increases in consumer spending are likely to be weak over the year as real income erosions from inflation continue and the persistently high price of oil hits household budgets through fuel costs,” said the Centre for Economics and Business Research.