UK Pay Body Expects Minimum Wage to Rise 4.1% in 2026

• Britain's main minimum wage rate will probably need to rise 4.1% next year to 12.71 pounds ($16.88) an hour to keep up with the government's goal for it to match two-thirds of median earnings, according to the body that effectively sets the rate.
• Britain's minimum wage has risen steeply in recent years - increasing by 6.7% in April to 12.21 pounds an hour - and last year it was the second-highest in Europe after France in relative terms, OECD data showed.
• Rising wage costs across the whole economy are seen by the Bank of England as one reason why British inflation has been higher than elsewhere in Europe, though it expects pressure to ease as the job market is slowing.
• Britain's minimum wage is set by the government each year based on a recommendation from the Low Pay Commission, a government-appointed body that includes representatives from employers, trade unions, and academia. Around 6.5% of British workers receive the minimum wage, and a significant number are paid only slightly more.
• A trade body for Britain's hospitality industry said rising employment costs had already led to reduced hours for staff. "Any significant wage hike may cost jobs. We urge the Low Pay Commission to recognise these cost pressures and recommend a more gradual and sustainable increase this year," UK Hospitality chair Kate Nicholls said.
• Earlier this week Britain's government gave guidelines to the commission on the factors it should consider, which were little changed from 2024. They include keeping minimum pay no lower than two-thirds of the median, while taking into account economic competitiveness and employment. In May, the commission predicted that the minimum wage for employees aged 21 and over, which the government calls the National Living Wage, would rise by 3.6% next year

(Source: Reuters)