MAYOR of London Boris Johnson, one of the very few politicians who until now has defended the City, has called on bankers to cut back on their Christmas bonuses.
Johnson said the spectacle of traders taking home large payouts would create a “combustible contrast” with the first wave of public sector job losses, which are expected to follow next month’s government spending review. An unwise display of wealth could provoke a regulatory backlash that would damage London as a centre for business, Johnson said.
“The banks have got to understand that this year public feeling may be even more inflamed than last and politicians will be facing colossal pressure,” the mayor wrote in a column. David Buik of BGC Partners said: “Boris is living in fantasy land. The banks need to get their profits up to the highest level they can to repay the taxpayer and if one of the ways to do that is to pay bonuses to attract profit-generators, so be it.”
In remarks certain to irk the Tory leadership, Johnson also claimed the main argument for cutting the Budget deficit early – to reduce gilt yields and protect the UK’s credit rating – “no longer looks as strong as it did”.