London investment bankers to rake in bigger bonuses after two-year slump

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.