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Last Updated: Thursday, 22 September 2005, 14:23 GMT 15:23 UK
Bankers 'to see jump in bonuses'
City of London skyline
The City of London is enjoying a good year
Investment bankers in the City of London are set to enjoy their biggest annual bonuses in four years, a study by a recruitment consultancy has found.

With the FTSE 100 reaching a four-year high this week, and an upsurge in takeovers and mergers, one in four bankers expect their bonuses to double.

Almost three-quarters expect their bonus will at least be higher than last year, Morgan McKinley found.

A separate Reuters poll also predicts that City bonuses are to rise strongly.

Most City bonus packages are awarded for the financial year starting on 1 April.

Bonuses for bankers working in the heart of the UK's financial district for the current 2005/06 year will typically be paid between January and April next year.

'Increasing expectations'

"For senior bankers base salaries are largely irrelevant - it's the bonus pool that is significant and with strong performances across the asset classes and product groups, expectations are growing," said analyst Simon Vaughan-Edwards, executive director at Alexander Mann Financial Markets.

Despite multiple reports of woe for UK retailers and manufacturers this year, added to high global oil prices; the FTSE 100 is at its highest level since 2001, helped by a wealth of corporate deals.

Takeovers or mergers conducted so far this year are worth a combined 90.6bn ($164bn) - compared to 94bn for the whole of 2001.

One of the biggest takeovers this year was Aviva's 1.1bn purchase of motoring services group RAC.

Reuters found that 73% of recruitment consultants said the current job climate in the City was better, or much better, compared to the same period a year ago.

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