Wages in the city are rising, increasing inequalities across the Channel

According to a study revealed by the Institute for Fiscal Studies (IFS) on Wednesday, May 4, salaries in the UK’s financial sector have skyrocketed in recent months, further exacerbating inequalities in the country, amid of a cost of living crisis. In February, the average monthly salary of financial workers was 31% higher than in December 2019, compared to a 14% increase across all industries, the survey found. Before the pandemic, “low earners saw their wages rise more than middle and high earners,” the study continues.

But this acceleration in the financial sector is exacerbating income inequality, while the sector is particularly well represented among the country’s highest earners. While Britain’s poorest households are being hit by rising inflation to its highest point in 30 years, wage increases “in the financial and insurance sector have reached unprecedented levels in recent months. Over the past decade”.

This trend also coincides with the decline in social minima as a result of the easing of the Covid-19 pandemic. “The outlook for low-income households is much bleaker now,” the IFS think tank said.

Increase bonuses and fixed salaries

But inequalities are also visible within the financial sector itself: wage increases are mainly concentrated among the highest incomes, according to this study, which is based on data from the British Revenue Service (HMRC) and the National Office Statistics (ONS).

The data could partly reflect an increase in the bonuses most frequently paid to companies in the sector in January and February, but the gap had widened before and “the data suggests there has also been an increase in wages” .

There is no clear explanation for the acceleration in wages in the financial sector, which according to the IFS has seen no staggering activity growth or a tighter labor market than elsewhere, even though “some major banks have reported very strong gains, partly due to increased mergers and acquisitions during the pandemic.”

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