City workers' hopes for a bonus take a hiding

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The Independent Online

Twice as many City workers expect to receive no bonus this year as did in 2012, as job losses continue apace in the UK's financial sector.

The recruitment firm Astbury Martin found 22 per cent of workers in the City are not expecting any kind of bonus during 2013, up from 11 per cent last year.

Mark Cameron, chief operating officer, said: "Many more employees in the City are gloomy about their bonus prospects this year. The FSA has recently warned the chairs of bank remuneration committees that they expect 2013 pay levels to be below those of previous years. This is an unprecedented move."

Cameron added that 44 per cent of those who work in the Square Mile cited pressure from politicians and regulators as the main reason for their lack of optimism on bonuses.

In November, the Centre for Economics and Business Research scaled back its predictions for total City bonuses from £2.3 billion to £1.6 billion on the back of lower bank profits and higher regulatory capital demands. That compares with the peak bonus year of 2008 when a total of £11.6 billion was paid out.

Meanwhile, the CBI will today say that job losses in Britain's financial sector are set to continue despite firms overcoming falling business volumes to ramp up profits.

The jobs cull worsened in the last three months, says the business lobby group. A 25 per cent balance of respondents also expect headcount to fall again in the current quarter.

The increase in profitability at financial firms has been fuelled by widening lending and increased fees and commissions as well as lower costs, the CBI said.