Lifting of cap on bankers’ bonuses expected in Chancellor’s autumn budget

Earlier, the Prime Minister urged bosses to keep down their pay to not exacerbate inflation.

Jeremy Hunt is expected to lift the cap on bankers’ bonuses when he delivers his autumn budget on Thursday (Victoria Jones/PA) (PA Wire)

Jeremy Hunt is expected to lift the cap on bankers’ bonuses when he delivers his autumn budget on Thursday.

The Financial Times first reported the Chancellor will make the lifting of the cap one of the few measures to survive from Kwasi Kwarteng’s disastrous mini-budget, as he bids to use the autumn statement to restore the UK’s economic credibility.

Earlier, the Prime Minister urged bosses to keep down their pay in order not to exacerbate inflation.

“Of course I would say to all executives to embrace pay restraint at a time like this and make sure they are also looking after all their workers,” Mr Sunak told ITV News.

Speculation continues about what exact measures will form part of the budget on Thursday, which has come with warnings from both the PM and the Chancellor of “difficult decisions” to be taken as Mr Hunt tries find up to £60 billion from a combination of hikes and spending cuts.

In part, the budget is widely expected to raise finances through stealth taxes by freezing the rates in which workers begin paying higher rates of tax with inflation and pay increases dragging more people into higher bands.

But tough spending cuts are likely too, with Mr Hunt reportedly eyeing up plans to cut funding for the Government’s homes for Ukrainian refugees scheme.

Over the last decade, Tory economic failures and wasted opportunities have led to Britain falling behind on the global stage, and left us with low growth, low productivity and widening inequality

Labour's Rachel Reeves

The Telegraph on Wednesday reported that the Chancellor is considering plans to reduce the amount of funding received by councils for some of the services for refugees hosted by UK families, in a move apparently being resisted by Levelling Up Secretary Michael Gove.

The paper also reported that Mr Hunt will use the budget to announce measures to support the long-term sick back into jobs, an issue that has becoming a growing preoccupation for the Government.

Office for National Statistics figures on Tuesday showed that the number of people off work due to long-term sickness jumped to a record high of 2.5 million.

With only a day until the budget, Labour has stepped up its attack on the Government over the gloomy economic outlook as the party said that under the Tories GDP is expected to “flatline” at the same level by the end of this current Parliament than it was at the beginning.

Shadow chancellor Rachel Reeves said: “Over the last decade, Tory economic failures and wasted opportunities have led to Britain falling behind on the global stage, and left us with low growth, low productivity and widening inequality.

“If I was Britain’s Chancellor giving the autumn statement this, I’d be focused on making fairer choices for working people who are bearing the brunt of this crisis – and I’d be putting forward a real plan to grow our economy.”