Exclusive: Rise in dealmaking likely to be reflected in spring bonus season as interest rate hike cycle ends

London’s investment bankers are expected to rake in bigger bonuses this financial year, as the City begins to recover from a two-year slump in deals caused by surging interest rates.

Demand for investment banking services – such as facilitating mergers and acquisitions, advising companies and governments on fundraising, and underwriting new stock and bonds – was hit by a sharp increase in borrowing rates after the pandemic, as central banks acted to tame runaway inflation. Jobs and pay were cut as investment banks sought to reduce costs.

Central bank raises concerns over newly elected governments as more than 80 countries go to polls this year

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Uncertainty caused by a global wave of elections, starting this weekend in France, risks destabilising the UK’s financial system, the Bank of England has warned.

Officials are concerned about the kind of policies that newly elected governments may enforce in large economies, including the US, where Donald Trump is vying for another term as president in the run-up to the election in November.