City bonuses lift earnings to highest level for year

A 400m (€646.6m) boost to City of London bonuses in February drove earnings to their highest level for nearly a year, according to official data released on Wednesday.

Together with figures showing unemployment continuing to fall and employment rising, the numbers led to a sharp upward revision of expected future interest rates.

The Office for National Statistics (ONS) said headline average annual earnings growth rose to 5% in the three months to February, up from 4.5% in January. The rise was due mainly to bonuses in financial services in February - estimated by the ONS as 400m higher than a year earlier.

More than half of the rise in City bonuses was caused by timing changes, as payments usually made in January or March were shifted to February. The rest reflected higher regular February bonuses than a year ago.