Bonus payouts for workers in London’s financial district are projected to fall to their lowest level in 15 years, according to a UK economics think tank.

The Centre for Economics and Business Research said that bonuses paid out on performance during 2012 will fall to £2.3 billion ($3.7 billion), down from £4.4 billion for 2011 and the £11.6 billion peak in 2007/2008.

The last time bonuses were close to that level was in 1998 when they stood at £2.5 billion.

“The collapse in City activity and the slack labour market mean that large bonuses are now the exception, not the rule,” the CEBR said.

“City remuneration levels are coming back into the real world,” said Douglas McWilliams, the firm’s chief executive. “Employees are being told, ‘your job is your bonus, so don’t expect a large sum in addition’.

“But before anti-City campaigners start jumping for joy, they should reflect on the fact that because City earnings are very highly taxed, the biggest loser of all will be the Treasury, meaning fewer funds available to finance public services," McWilliams said.

Earlier this week, the CEBR made a sharp downward revision in its estimate of the number of financial services jobs in London. The average number of City jobs for 2012 is likely to be down to 255,000 compared with the estimate of 288,000 made six months ago, the firm said. The further fall reflects the impact of the euro crisis on the banks feeding a second credit crunch.