UK govt raises minimum wage to $16.67/hr

The United Kingdom government has announced that the minimum wage rate will rise by 4.1% to 12.71 pounds ($16.67) an hour in April 2026 to keep up with average pay.

The announcement comes despite complaints from some employers that the increase 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.

It lets the government announce good news for low-paid workers the day before Reeves delivers her annual budget, expected to include tens of billions of pounds in tax rises.

UK’s inflation rate reduces for first time in 5 months

“The cost of living is still the number one issue for working people, and the economy isn’t working well enough for those on the lowest incomes,” Reeves said in a video message on Tuesday, November 25, 2025.

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.

Employers have also said that higher labour costs have contributed to reduced hiring this year. The unemployment rate has risen to its highest since 2021 at 5.0%, Reuters reported.

The increase was in line with a provisional recommendation made in August by the Low Pay Commission, which includes representatives from business, trade unions, and academia.

The Star