UK Government Approves 4.1% Rise in Minimum Wage For 2026

• Britain's main minimum wage rate will rise by 4.1% to 12.71 pounds (US$16.67) an hour next April to keep up with average pay, the government said on Tuesday, despite complaints from some employers that this will push up prices.
• Britain's minimum wage is the second-highest in Europe relative to average pay and has risen by more than 60% since 2019 as successive governments sought to lift it to two-thirds of median hourly earnings. Finance minister Rachel Reeves said the new increase, which follows a 6.7% rise earlier this year, was needed "so that those on low incomes are properly rewarded for their hard work"
• The increase will benefit 2.4 million workers aged 21 and over, while a further 300,000 apprentices and workers aged under 21 will get a rise of 6.0%-8.5% as the government continues to phase out lower minimum wages for these groups. However, the increase drew criticism from Britain's hospitality industry, which said it would lead to higher prices.
• Britain had the highest inflation rate of any major advanced economy at 3.6% in October, driven in part by faster wage growth since the COVID-19 pandemic. While the Bank of England expects inflation to return to its 2% target by mid-2027, many of its policymakers think wage growth faster than about 3% will make hitting that goal harder, due to persistently weak productivity growth.

(Source: Reuters)