Britain’s minimum wage will increase by 6.7% from April 2024, raising the hourly rate to £12.21 ($15.88) for most adults, according to an announcement from Finance Minister Rachel Reeves. This pay hike, part of the new Labour government’s commitment to a “genuine living wage,” will directly impact around 3 million workers. Younger workers are set to see even larger gains, with minimum wages rising by 16.3% for those aged 18-20 and 18% for 16-17-year-olds.
The move, however, has raised concerns from employers and industry groups. The Confederation of British Industry warned that the increase could strain company finances and limit investment, while the Low Pay Commission (LPC), which advises the government on wage policies, noted that businesses are increasingly struggling to adjust to rapid wage hikes. Some experts, including the Resolution Foundation, caution that employers may turn to self-employed workers to manage costs, potentially undercutting wage growth.
The Bank of England is also keeping a close watch, as wage growth remains a critical factor in assessing inflation and the potential for interest rate cuts in the near future.
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