Millions of workers will see pay rise from April as the UK Government increases the minimum wage ahead of today's Budget.
The hourly rate for over-21s will rise to £12.71, with 18–20-year-olds moving to £10.85 and under-18s and apprentices to £8.
Chancellor Rachel Reeves said 2.7 million people would benefit, adding: “The economy isn't working well enough for those on the lowest incomes.”
The Treasury said the new rates balanced “the needs of workers, the affordability for businesses and the opportunities for employment”.
However, Kate Nicholls of UK Hospitality said the chancellor must cut the sector’s tax burden “if businesses are expected to sustain this level of annual wage increase”.
She warned: “Hospitality businesses have reached their limit of absorbing seemingly endless additional costs. They will simply all be passed through to the consumer, ultimately fuelling inflation.”
Jane Gratton from the British Chambers of Commerce said every above-inflation increase “leads to higher business costs, lower investment and fewer opportunities for individuals”.
She added: “There's a limit to how much additional cost employers can bear without something having to give.”