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Your Pay Is Falling Even More Due To Bank Bonuses, Say Official Stats

Your Pay Is Falling Even More (Due To Bankers)
Asa Bennett
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LONDON, ENGLAND - JUNE 10: Chancellor of the Exchequer George Osborne leaves Number 11 Downing Street on June 10, 2014 in London, England. Mr Osborne is due to announce this week new incentives for builders to develop derelict sites in towns and cities to help protect the green belt. (Photo by Oli Scarff/Getty Images)
Oli Scarff via Getty Images

George Osborne's political boost today from figures showing an increasing number of Britons in work has been undermined by data claiming Britons' pay packets are still being eaten away by inflation — driven largely by bank bonuses.

Pay growth slowed to 0.7% from February to April, a sharp fall on last month's figure of 1.7%, well below the latest inflation rate under the Consumer Prices Index (CPI) of 1.8%. Excluding bonuses, pay increased by 0.9% during the same period.

This slowdown in total pay was largely accounted for by City bonuses, which fell sharply compared with a period last year when many banks delayed paying them until April to get around paying the 50p top income tax rate, which George Osborne announced would be abolished.

Dr. Howard Archer, Chief UK economist at IHS Global Insight, said: "A number of companies delayed paying bonuses in 2013 to April due to the cut that month in the top rate of income tax from 50% to 45%. This obviously affected only the top earners, many of whom would have been in the financial sector."

This comes after official figures in April suggested that average pay rises had outstripped pay rises for the first time in four years, but only for those who received bonuses.

David Cameron welcomed the news in a message on Twitter, writing: "A record rise in employment for last 3 months. 5500 more people in work each day. All with the security of a pay packet and brighter future."

The gloomy news for Britons' pay packets comes as the ONS confirmed that the number of Britons in work rose by 345,000 in the three months to April to 30.54 million, capping off an annual rise of 780,000 jobs.

Unemployment fell by 161,000 to 2.16 million, with the jobless rate dropping to 6.6%.

10 Awkward Facts About Osborne's Failure To Get Britain Exporting
£1.5 billion on a scheme that has helped no-one yet...(01 of10)
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A £1.5bn direct lending scheme launched in 2013, aiming to offer loans of between £5 million and £50 million to overseas buyers looking to buy from British exporters, has received only 15 inquiries, with just one firm applying for support.
A £5 billion exports scheme did nothing for 2 years...(02 of10)
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A £5bn export refinancing scheme, launched in July 2012 and intended to be running by the end of that year, has only now been launched this April.
Another scheme helped just five businesses (03 of10)
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The government ditched its "Export Enterprise Finance Guarantee" scheme after it helped only five firms.
The UK hasn't improved much over the last year(04 of10)
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According to the Office for National Statistics, the UK's balance of trade is just as negative as where it was over a year ago - with the UK importing £2.5bn more than it exports overall.
Wasn't George's aim to get Britain exporting? (05 of10)
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The Tory party manifesto of 2010 stated that "a sustainable recovery must be driven by growth in exports." Meanwhile, George Osborne promised in June 2010 to "raise from the ruins of an economy built on debt a new, balanced economy where we save, invest and export." He went on to promise in 2012 to double British exports to £1 trillion by the end of the decade, a target that MPs recently warned he was going to miss.
The UK looks to be losing the global race(06 of10)
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Despite coalition rhetoric that the UK is in a "global race" against other countries, the OBR warned that they expect the UK's share of the export market to keep shrinking as it loses out to competitors over the next few years.
Will Osborne's export efforts mean much? (07 of10)
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The OBR also estimated that the amount exported by Britain will be so dwarfed by how much it imports that it will slightly drag down growth this year and then make "little" contribution to growth over the next few years.
The IMF says UK exports are too weak(08 of10)
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Christine Lagarde, head of the International Monetary Fund, said last week that UK exports remain "subdued", adding: "The export cylinder is one that could fire a little more strongly."
We're having to rely more on foreign investment(09 of10)
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The UK’s current account, which summarises the transactions between Britain and the rest of the world, has been getting worse, leading the ONS to conclude that the country was "becoming increasingly dependent on inflows of foreign capital". (credit:ONS )
George knows he has his work cut out...(10 of10)
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"The job is never done," the Chancellor admitted in April as he unveiled his latest raft of reforms to get British business trading.
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