When dealmaking dries up, so do big handouts for bankers, accountants, lawyers and other advisers who rely on major transactions to fund their earnings.
The Government last year scrapped the cap on bankers’ bonuses, a hangover from before Brexit, in an attempt to boost the City.
Pay across the economy as a whole grew by almost 6pc in the first quarter of the year compared to the same period of 2023.
More growth is expected into the new financial year as the national living wage jumped by almost 10pc in April to £11.44 per hour.
The average worker in finance and insurance earned £2,617 a week in March, according to ONS estimates, far above the £682 paid per week to the typical worker in the economy at large.
But the end of growth in earnings for financiers is bad news for the Exchequer because well-paid workers pay higher rates of tax.
Isabel Stockton at the Institute for Fiscal Studies said that these preliminary numbers appear to break the trend of recent years, in which pay growth among higher earners has contributed to tax-rich economic growth, boosting the state of the public finances.
If it becomes a longer-term issue then there will be implications for the Government’s ability to hit its borrowing targets, which require that the debt falls between the fourth and the fifth year of each set of forecasts published by the OBR.
Risks to tax receipts from bonuses are only one of several challenges to the finances.
Debt interest payments are also a strain, and one which is set to continue as financial markets expect the Bank of England to wait until later in the year before cutting interest rates from their 16-year high of 5.25pc.