2006 bonuses to be up by 16%

City bankers and traders can expect a healthy pay-out come next spring as the Office for National Statistics says bonuses are projected to rise by 16%.

Financial service employees are expected to take 10bn of the expected 19bn payout to directors and bankers, The Times reports, up 2.5bn from 16.5bn last year.

The increased bonus pool this year would equate to 25,000 each for every City worker, a fact TUC deputy general secretary Frances O'Grady says "beggars belief".

According to the Office for national Statistics' annual report, the rise follows a 1.5bn increase last year, suggesting a 25% increase over two years.

British banks made a combined 33bn profit last year and are expected to outstrip that this year after a bumper first six months despite an increase in personal insolvencies and bad debts.

Many banks have reported record profits this year thanks to the revival of the stock market and the M&A boom, and the Evening Standard says a small number of investment bankers and financiers are believed to be the biggest beneficiaries of the bumper bonuses.