Government considering scrapping bankers' bonuses cap

According to reports, the Treasury is considering removing the cap on bankers' bonuses.

The change would be part of a post-Brexit shake-up of City rules and an attempt to make London more attractive for global banks.

The EU bonus rules cap bonuses at two times an employee's salary.

City bosses have criticised the cap as they say it leads to higher base pay, which increases a bank's fixed costs.

Though others have argued that uncapped bonuses lead to excessive risk taking of the kind that led to the 2008 financial crisis.

The proposed removal of the cap has also been criticised as many people are struggling with the cost-of-living crisis.

Andrew Sentance, a former member of the Bank of England's Monetary Policy Committee, told the BBC that the proposal "sends a rather confused signal when people are being squeezed in terms of the cost of living, and the government is trying to encourage pay restraint in the public sector."

"To appear to allow bankers to have bigger bonuses at the same time, doesn't look very well timed. There may be some longer term arguments for pursing this policy but I think the timing would be very bad if they did it now."

Rachel Winter, from Killick & Co, told the BBC: "It's an absolutely terrible time for this headline when you've got inflation [at] a 40-year high, you've got so many people struggling with the cost of living, do we really want to be reading headlines about banker bonuses?

"Arguably the banks do pay a lot of tax, so I think the chancellor is looking at ways to boost the UK economy to get more banks to come to London, to stay in London and pay more tax."

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