In a significant move as part of a post-Brexit shake-up of UK financial rules, it has been confirmed that the cap on bankers’ bonuses will be removed from October 31. This plan, initially announced by former Chancellor Kwasi Kwarteng last year, aimed at making London a more appealing destination for business. Surprisingly, it remains one of the few mini-budget policies retained after most were unwound by Mr. Kwarteng’s successor.
The cap on bonuses, introduced in 2014 during the UK’s EU membership, was designed to curb excessive risk-taking in the financial sector following the 2008 financial crash. The cap limited the variable pay of employees in financial institutions, leading finance bosses to complain about higher base pay that escalates fixed costs. Critics argue that removing the cap could heighten financial risks and favor the wealthy during a period of widespread household struggles with the cost of living.
Slowing Job Market Reinforces Predictions of Unchanged Interest Rates
Indicators of a slowdown in the UK job market, with a 4.2% unemployment rate between June and August, are reinforcing predictions that interest rates will remain unchanged in November. As businesses hire less amid the impact of rising prices and higher interest rates, the economic growth of the UK has shown sluggishness in recent months. The Bank of England faces a delicate balancing act in deciding whether to increase, decrease, or maintain the benchmark rate at 5.25%, especially after a cycle of 14 consecutive rate rises ended in September
Real Living Wage Boosts Incomes for Hundreds of Thousands
Starting Tuesday, hundreds of thousands of UK workers will enjoy a 10% pay rise as their employers participate in the voluntary Real Living Wage scheme. The increase, from £10.90 to £12 an hour outside London, is hailed as a “lifeline” for low-paid workers by the Living Wage Foundation. Employers can choose to pay the real living wage, higher than the government-set minimum wage, but a business group warns of limits to what firms can afford. The scheme, set up by the Living Wage Foundation charity, commits employers to pay rates reflecting the charity’s assessment of the costs needed to cover everyday expenses, making it £1.58 more than the government-set National Living Wage of £10.42 an hour for those over 23.
