As deals dry up, so does the wealth of aid to bankers, accountants, lawyers and other advisers who rely on big deals for their revenue streams.
Last year, the government removed the cap on bankers' bonuses, a holdover from before Brexit, in a bid to revitalise the City.
Wages across the economy grew by about 6% in the first quarter of this year compared with the same period in 2023.
Further growth is expected in the new financial year after the national living wage rose by nearly 10% in April to £11.44 an hour.
The average worker in the finance and insurance sector earned £2,617 a week in March, far more than the typical worker across the economy earned at £682 a week, according to ONS estimates.
But the end of profit growth for lenders is bad news for the Treasury, because highly paid workers pay higher tax rates.
Isabel Stockton, from the Institute for Fiscal Studies, said the preliminary figures appeared to break the trend of recent years in which higher wage growth for high earners had contributed to tax-rich economic growth and boosted public finances.
If this becomes a longer-term problem it will affect the government's ability to meet its borrowing targets, which require debt to fall between years four and five of the OBR's projections.
The risk to tax revenue from bonuses is just one of several fiscal challenges.
Debt interest payments are also a burden and are likely to remain so with financial markets predicting the Bank of England will wait until later this year to cut interest rates from a 16-year high of 5.25%.
