Lehman's UK staff will get paid

10:05pm Wednesday 17th September 2008

The 4,500 UK staff facing the axe at Lehman Brothers gained some comfort after administrators said their September pay packets were assured.

The news ends the doubts over wages since Monday when PriceWaterhouseCoopers said they could not guarantee the funds to pay salaries at the collapsed bank.

PwC partner Tony Lomas said staff would get paid - as long as they come into work - after the administrators arranged a loan from global financial institution CarVal.

He said: "We have successfully concluded negotiations on raising funds... which has enabled us to give the undertaking that before the end of the month we will be paying all staff here, so long as of course they're turning up to work in order to help us in our efforts to take this forward."

Lehman's collapse on Monday has set in train a week of unprecedented turmoil in the global financial system after the US Treasury refused a rescue and would-be buyers walked away.

The investment bank had 24,000 staff worldwide but was hugely exposed to the tumbling US housing and commercial property markets.

Barclays - which walked away from a possible deal at the weekend - has since bought some assets from the bankrupt firm for around £2 billion.

Rival Merrill Lynch has sought shelter from the storm in a takeover by Bank of America in a week which has also seen US insurance giant AIG bailed out by the US Government.