Bonus warning

CBI director general Richard Lambert today urged banks to be "very very sensitive" in the coming months over the payment of bonuses, as public-spending cuts start to hit the jobs and pay of workers.

He warned of "political consequences" if banks pressed ahead with huge bonus payments in the current climate of austerity.

Business Secretary Vince Cable has already hinted at legislation to curb excessive City bonuses, a move Lambert said he would oppose because he was always against "windfall" taxes.

But, speaking ahead of the CBI's national conference next week, he added: "Banks are going to have to be very very sensitive in the coming months.

"If they just press ahead with substantial bonuses at a time when public-sector workers are being laid off, there will be political consequences. They will be soaked in some way."