LONDON (Reuters) - Britain is steeling itself for painful spending cuts, but the good times are still rolling for the rich, including the bankers blamed by many for the country's economic woes.

Rescued by taxpayer money, banks are booming again, while in London's upmarket shops on Bond Street and Savile Row, Rolex watches and tailored suits are still flying off the shelves and into Mercedes and Alfa Romeo sports cars parked outside.

Still, while conspicuous consumption may continue unabated, there are signs that the rich may also be giving more to charity as Britain prepares for an era of austerity.

The new Conservative-led government will publish a budget on June 22 to reduce the record budget deficit — run up partly to bail out banks hit by the 2008 financial crisis — and the expected spending cuts are likely to be the deepest in 30 years.

The outlook for London's bankers, however, seems brighter.

"I think it's back to boom, boom time for banks. We've got less competitors. Every bank's share of business has gone up for doing nothing," said a banker who declined to be named in London's Canary Wharf financial district, home to banks including HSBC, Citibank and Barclays.

The impact of a one-off British tax on bank bonuses last year was softened as most banks absorbed the costs rather than pass it on to employees, and some spread the levy across their global networks, reducing the effect on London.

Meanwhile, banks are riding a global economic rebound, keeping upward pressure on pay in the hunt for talented workers.

Lloyds and the Royal Bank of Scotland, which both received state bail outs, have both beat expectations and returned to profit in the first quarter.

Foreign banks, including Goldman Sachs, JPMorgan and Deutsche Bank, have sizeable British operations and have reported bumper profits.

A February survey found bankers in London had received an average bonus increase of 40 percent this year and most also received a jump in base salary.

Countries that raided their coffers to bail out banks are trying to coordinate to introduce new rules that will claw back rescue money and reduce risky banking practices, but progress has been slow with no major legislation agreed so far.

Among the rich in general, the collective wealth of Britain's 1,000 most affluent people rose by about a third in the past year, according to the annual Sunday Times Rich List, published last month alongside a story citing "soaring" fortunes on the back of higher stock markets and resurgent banks.

Cashing in on hardening public attitudes to bankers and the rich, politicians campaigning for Britain's May 6 election promised to crack down on banks and create "fairer" a society.

Britain's new business secretary Vince Cable has vowed no return to "business as normal" and new banking "disciplines," but his influence may be tempered by the ruling centre-right Conservative Party's traditional pro-market stance.

Members Prime Minister David Cameron and finance minister George Osborne both come from wealthy, privileged backgrounds while Cable's left-leaning Liberal Democrat party is the junior partner in the new coalition government.

Some in London's finance industry, known as the City and on which Britain's economy heavily relies, were defiant.

"What is needed is the City to start growing the economy again. People can bash banks and the City as much as they like, but if you squash the City, you squash Britain's economy," said a finance lawyer who declined to be named.

Other City workers said it was unfair to punish them all for the bad decisions of a fraction of bank employees.

"We make sure everything we've done is legal. What more can you do? The people responsible for the credit crunch are no more than five or so people in a bank," said the Canary Wharf banker.

Another said politicians were using to them to detract attention from their failure to legislate good banking rules.

"Bankers are an easy scapegoat to deflect attention from the poor performance of the politicians," he said.

Far from contrite as the rest of Britain tightens its belt, City workers questioned by Reuters said their spending, or that of their richer colleagues, on luxury items had not dropped.

An April wealth report by the Economist Intelligence Unit said: "The so-called new austerity does not apply to the very wealthy. They continue to spend much the same amount as they did before downturn, but they will be less flagrant."

High-end shops in London's expensive Mayfair district said they had not seen demand fall, and luxury goods makers Moet Hennessy, Luis Vuitton and Hermes have posted forecast-beating first quarter profits, partly on higher European sales.

But while conspicuous consumption may be on the rise again among the wealthy, growing deprivation in the rest of society may be prompting the rich to also flash their cash for charity.

In the first quarter of this year, the Charities Aid Foundation (CAF), which helps bring charities and donors together, said it had opened new charitable trust accounts containing £70 million ($101.2 million) in donations, more than three times the amount in the same period last year.

"The UK economic outlook may still be uncertain but according to figures from the CAF, philanthropic activity is beginning to rise," the organisation said last month.

New Philanthropy Capital (NPC), a charity consultancy and think tank, said in March philanthropy was growing.

The past decade has seen more self-made, rather than inherited wealth, and rich people who remember their humble roots are seen as more likely to give, or give more, to charity.

Also, high-profile giving is encouraging others to give more, with NPC citing the philanthropy of Microsoft founder Bill Gates, a tripling of newspaper coverage of the issue and the British television show "Secret Millionaire," in which a wealthy individual seeks causes to donate to.

"The current economic downturn appears to be prompting some to re-evaluate their social values," the NPC said in a report.