Yes, salaries are up. But bonuses are down 36% from their peak

When the CEBR speaks about bonuses, it's worth listening. It was, for example, the CEBR which postulated 7bn for the size of the UK's total bonus pot last year, a figure which came to be taken as gospel by everyone.

Today the CEBR has something new to say on the subject.

It thinks the UK bonus pool for 2010 was actually lower than 7bn (6.8bn). It also thinks that this didn't matter because salaries increased substantially.

Based on figures from the Office of National Statistics, the CEBR now says the UK bonus pool fell 8% last year. However, boosted by an increase in salaries, it thinks total pay in the City rose 7%.

If salaries and bonuses are split equally, this implies salaries must have increased 22% in 2010.

Did they?

As we noted in December, there have been some big salary increases at senior levels, but most of the rises took place in 2009-2010. UBS admitted this morning that it increased salaries in March 2011, but only by 5-10%.

On a per-head basis, bonuses are also looking fairly dire. The CEBR estimated previously that there are 314,000 people working in the City of London, suggesting the average bonus for 2010 was just 21k, a decrease of 22% on 2009.

Notably, this was down 36% on 2006/2007, when the CEBR suggests bonuses per head peaked at 33k.

CEBR's forecasts for the future UK bonus pool:

2010/2011 6.8bn

2011/2012 7.2bn

2012/2013 7.4bn

2013/2014 7.7bn

2014/2015 8.2bn