Bank bonuses set to rise 50%

As bank profits start to recover, bonus payments for City financiers are likely to rise, according to a leading research group.

In a new report, the Centre for Economics and Business Research (CEBR) predicts that annual bonuses will rise by 50 per cent this year.

It claims that higher profits coupled with reduced competition will push bonus payments up from £4 billion in 2008 to £6 billion in 2009.

They will continue to rise in the three years following, reaching a peak of £7.5 billion in 2012, the CEBR states.

However, this is well below the £10.2 billion that was paid out in 2007 before the financial crisis took hold.

This is partly down to large job losses in the City, with almost 50,000 bankers having lost their jobs during the downturn.

Speaking to Sky News recently, the economist Roger Bootle said he was "outraged" by the size of the bonuses being paid in the banking industry.

"It is frankly outrageous that taxpayers should have poured all this money in and then it's going out through the door in bonuses," he remarked.