Government Approves 4.1% Wage Increase
The UK government has announced that the national minimum wage will rise to £12.71 an hour from April 2026.
This is a 4.1% increase on the current rate. It will help around 2.4 million workers aged 21 and over.
Apprentices and workers under 21 will also see higher pay, with rises between 6% and 8.5%.
Finance Minister Rachel Reeves said the increase ensures low-income workers are properly rewarded for their hard work.
The new rate follows a 6.7% increase earlier this year. It aims to keep pace with average pay growth.
Britain’s minimum wage is now the second-highest in Europe compared to median earnings. Since 2019, it has risen by more than 60%.
Reeves added that the measure comes just before her annual budget announcement, which may include significant tax changes.
“The cost of living remains the number one concern for working people,” Reeves said in a video message.
Industry Concerns Over Price Increases
The wage rise has sparked criticism from the hospitality sector.
Kate Nicholls, chair of UK Hospitality, said businesses have reached their limit absorbing costs.
She warned that higher labour costs will be passed on to customers, fueling inflation.
Nicholls also noted that bigger pay rises for young and less experienced workers could make jobs harder to find.
The UK recorded the highest inflation rate among major advanced economies at 3.6% in October. Wage growth since the pandemic has contributed to this trend.
The Bank of England expects inflation to return to 2% by mid-2027 but warns that wage growth over 3% may delay this goal.
Employers also cite higher wages as a factor behind slower hiring. Unemployment has risen to 5%, the highest since 2021.
The Low Pay Commission, which recommended the 4.1% increase, said previous rises did not significantly impact employment.
Commission chair Philippa Stroud stated the decision balanced the pressures on workers and businesses.
The recommendation follows consultations with workers, employers, and trade unions, ensuring fair pay while considering economic challenges.
