HEALEY EXPECTED TO ANNOUNCE MINIMUM WAGE RISE

Chancellor John Healey is expected to announce a 3.9% rise in the National Living Wage at Wednesday’s Budget. The adult rate would increase from £12.71 to around £13.20 an hour from next April. The lower youth rate would also rise by about 3.9%, from £10.85 to around £11.27. The expected decision would leave a gap between the two rates. Healey is expected to accept recommendations from the Low Pay Commission, which advises the government on minimum wages.

Labour pledged in its manifesto to end what it called “discriminatory” youth rates by increasing them faster than the adult rate. Its previous two Budgets brought larger increases for younger workers. Accounts of the youth rate’s age range differ, giving its upper age as either 20 or 21; the adult rate applies from 21. The proposed adult increase exceeds the Consumer Prices Index annual inflation rate of 3.5% for September 2026. In March, the Low Pay Commission said it was likely to recommend an adult increase of up to 5% for 2027.

Employers have said higher wage costs affect their ability to hire young workers. Hospitality business owners have cited minimum wages, National Insurance contributions, VAT on hot food and energy bills among their rising costs. Figures released this month put youth unemployment at 15.6%, with 54,000 more young people out of work than a year earlier. Separate figures put the number of young people in the UK outside education, employment or training at 940,000, up 195,000 over two years. Healey’s Budget announcement will confirm the rates the government intends to introduce next April.