UK MINIMUM WAGE INCREASES KEEP BANK OF ENGLAND ON ALERT (www.ft.com/)
A second successive jump in the minimum wage keeps the Bank of England on high alert for signs of pay growth feeding inflation, even as broader price pressures in the economy start to ebb. Official figures last week showed wage growth finally slowing from record highs, with average earnings only 3.5% higher in this quarter than last quarter.
The BoE is expected to hold interest rates at 5.25%, as it waits for more evidence of cooling pay growth and inflation. New data on consumer prices will be published tomorrow. In April, the main hourly rate of the statutory national living wage will rise by 9.8% to £11.44. Younger workers and apprentices will enjoy an even bigger lift of up to 21% in their hourly pay.
The UK’s statutory wage floor is already one of the highest in the rich world. But economists say the effects of further increases on falling price growth are increasingly unpredictable and could be one reason why the BoE waits longer than other central banks before cutting rates.
Analysts warned that the increase could have a bigger impact than usual on consumer prices — because its effects would be concentrated in sectors where employers were competing fiercely for staff and many wanted to stay ahead of the statutory minimum. #productivity #kentbusiness #kentinvictachamber #minimumwage #outlook2024 #cashflowmanagement