Britain will be the best performing G7 nation in the second half of 2010 but at a rapidly slowing rate of growth, the Organisation for Economic Co-operation and Development has said. It predicts growth of 0.7 per cent for this country in the third quarter up from an estimate of 0.5 per cent in May.
Either figure will nevertheless be a significant slowdown in growth from the 1.2 per cent achieved in spring’s second quarter.
By the end of the year, the OECD is predicting even slower growth of 0.4 per cent, revised down from 0.5 per cent The Paris-based organisation also suggested a rethink about its own earlier calls for government cutbacks in public spending in view “a slowdown in the pace of recovery of the world economy that is somewhat more pronounced than previously anticipated”.
Despite the slowdown, bonuses for bosses at Britain’s biggest companies were back to pre-crash levels despite the recession.
Management and audit consultants Deloitte said the average bonus for FTSE 100 executives rose from 95 per cent to 98 per cent last year as performance targets and bonus thresholds were set low in anticipation of poor trading in the recession.
At the FTSE 100’s top 30 firms, bonuses comprised 140 per cent of directors’ pay, up 20 per cent on the year before. Top earners were BG Group chief executive Frank Chapman, paid £28 million in 2009-10, and Reckitt Benckiser chief Bart Becht, paid £93 million.
But among smaller companies one in seven FTSE 250 companies paid no bonuses at all, while one in two said they will not increase executive pay this year. Average pay increases are expected to be around 3 per cent. Banking regulators from 27 countries drew up new rules requiring banks to hold seven per cent of capital in reserve – as opposed to the current 2 per cent – but the new limit, which will be introduced incrementally, will not be in force until 2019.
Meanwhile, those companies who do pay their executives bonuses of £1 million or more in the next bonus round will not be required by law to publicly name the recipients, as the promised law will not be in force in time for the 2011 payments.
