Scrapping banker bonus cap would be 'shameful', campaigners warn

Sources close to new chancellor Kwasi Kwarteng confirmed reports in the Financial Times that he is considering the move as a way of making London a more attractive place for global banks to do business.

The current rules cap bonuses at twice an employee's salary, but city bosses have argued that the cap only pushes up base pay and subsequently banks' fixed costs.

However, industry campaigners have called the move "tone deaf" amid the current cost of living crisis.

Fran Boait, executive director at Positive Money, said: “Gifting bankers uncapped bonuses at a time when millions of households are choosing between eating and heating is beyond tone deaf - it’s shameful.

“Providing greater relief to the wealthy than the poor has characterised Truss’ premiership so far, with the energy price cap freeze announced last week expected to disproportionately benefit the highest-income households.

“The new government’s priority right now should be raising incomes for the lowest earners, not City fat cats.”