George Osborne is getting it the neck from all quarters of the City over his proposal to cap cash bonuses at retail banks at £2000.

This, from Ken Brotherston, managing director of headhunter GRS Kinsey Allen: “These comments demonstrate an inherent lack of understanding of how the banking sector works.

“If Osborne's proposals go through, the UK could well sacrifice its position as a global leader in the financial services sector. A cap of this kind will drive the top talent from where they are needed most, into the grateful arms of the investment banks and hedge funds who would remain unaffected by his plans.

“If taxpayers are to see a quick return of the money poured into the state supported institutions, they'll need to hang onto as many of their top flight people as possible.

“Mr Osborne should be more concerned with the long-term health of the British banking sector — which the British taxpayer now owns a very large chunk of — rather than merely scoring cheap political points and headline grabbing.”

Ouch.

City parking keeps Jeffrey on his toes

GOLLY. Novelist and jailbird Lord Archer is fed up with undertaking charity auctions in the City of London because of the parking difficulties.

“Vintner's Hall seems to have no solution to the parking problem,” he says. “As Upper Thames Street is not only one-way and red-lined, it's also about a mile in length, so on a rainy evening — as it was last night — you have to park some considerable distance away.”

He adds: “I was grumbling about this to Tory MP Peter Bottomley at a reception at the House of Commons prior to the dinner, to which he smiled and said, Wait until you get invited to do an auction at Draper's Hall, Jeffrey. Don't bother looking for a parking space, just take a cab.'”

Revision goes down as well as up

CITY economists caught out by just how bad the recession is in the UK are hoping last week's official figures — which showed the economy had shrunk by 0.4% rather than grown by 0.2% as expected — will be revised up. But they could be disappointed.

In the last five years, the official GDP data has been revised up five times but down 10 times. “We've had previous quarters which actually haven't been revised up, they've been revised down,” said former Bank of England doom-monger David Blanchflower.

“There's every prospect that number will probably get revised down not up.” Oh dear.

* FANCY some lawyer-bashing this Christmas? Head to Asda. When the supermarket renegotiated its legal panel this year, cutting down from 16 firms to a mere three (McGrigors, Pinsent Masons and Ward Hadaway), it forced them to sign up to a “partnership charter”. That means lawyers on the Asda contract must give up three days of their Christmas break to do shelf-stacking — for nothing. Sounds like they were desperate for the business…

* Word on the trading floor is that well before Lloyds Banking Group's 7.2% fall on Monday, on news the EU was calling for ING to be broken up, it was common knowledge that hedgies were queuing up for a Lloyds short...

* ADAM Posen, a new member of the monetary policy committee at the Bank of England, is adamant that quantitative easing will not result in inflation and branded those who thought it would “nutters”. Surely he wasn't referring to David Cameron, who in his conference speech this month said that “sometime soon” the policy “will have to stop because in the end printing money leads to inflation”.

* MERVYN King often described the decade up to 2007 as a “nice” period — one of “non-inflationary consistent expansion”. City scribbler Howard Archer — chief UK economist at IHS Global Insight — says “nice” now stands for “non-inflationary contracting economy” before adding: “As it's rather inappropriate to call what we're going through as nice', perhaps we would be better off saying we are suffering from lice' — low-inflation contracting economy'.”

* THE latest joke doing the rounds in the City: Q: What does an investment bank have in common with model/writer/celebrity divorcée Katie Price, aka Jordan? A: Both are institutions whose reputation is built on assets which — on closer inspection — turn out to be entirely artificial, vastly over-inflated and in danger of going through the floor at any moment.