Why is there no pay restraint in the city?
As the battle between Gordon Brown and the UK banking sector continues unabated there are serious concerns as to why the city has yet to instil significant pay restraint in these difficult times. Aside from the fact the authorities are being forced to bail out a number of UK banks, leaving the UK taxpayer with a substantial shareholding in many, it appears that pay rises and bonuses are still the norm in the city.
As we have covered on a number of occasions, the UK government is set for a head-on confrontation with UK taxpayers with suggestions that the authorities have been unable to restrain pay rises and bonuses in the banking sector. This goes completely against what Gordon Brown had promised only a few weeks ago, and his unreserved support for Barack Obama's similar strategy in the US. They would also appear to be serious unrest from a number of Labour backbench MPs and while nobody expects a leadership challenge in the short term, there is concern that support for Gordon Brown is starting to drain away.
The political polls indicate that the UK taxpayer has had enough of rescue packages and substantial bailouts with support increasing for the Conservative party who would hold a substantial majority if the polls are right and an election was held tomorrow.
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