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City salaries rise by 7 per cent

Smaller bonuses over the last year have made no difference to earnings, with higher basic salaries a

City of London workers have received 7 per cent higher basic salaries over the last year, according to a study by the Centre for Economics and Business Research (CEBR) published today.

Such a permanent rise is far higher than that of any other UK employees, whose wage settlements increased by 2 per cent over the same period. This minor change is negligible in the face of a 5.3 per cent rise in inflation as measured by the retail price index for March. Ever rising costs of oil and food will continue to squeeze consumer spending.

Meanwhile the great jump in City earnings, as revealed by Office of National Statistics data, fully off-sets the smaller bonuses paid to City workers last year. Overall bonus payments fell by 8 per cent from £7.3bn to £6.7bn - though still remain far higher than 2009 payouts of £5.3bn.

CEBR economist Scott Corfe corroborated the findings of his report, saying: "City workers are not earning less - their earnings are merely becoming less bonus-driven as basic pay continues to grow much faster than other parts of the economy."

Janet Williams of the TUC said: "Ordinary people are paying a heavy price for the economic problems the banks helped cause. Essential services are being cut, workers are seeing a real-term cut in wages as prices rise higher and faster than their salaries and many are at risk of losing their jobs."

"Despite all this hardship it's very quickly gone back to business as usual in the City", she said.

Alice Gribbin is a Teaching-Writing Fellow at the Iowa Writers' Workshop. She was formerly the editorial assistant at the New Statesman.