World Economy

UK to Announce New Wage Rate

UK to Announce New Wage Rate UK to Announce New Wage Rate

Britain will introduce a new, compulsory National Living Wage for workers aged over 25 which will rise steadily between its introduction next April and 2020, Finance Minister George Osborne said on Wednesday.

In a surprise announcement within a post-election budget statement, Osborne said the new wage rate would be set at £7.20 ($11.06) an hour, higher than the £6.70 hourly rate that the existing minimum wage is set to reach in October, Reuters reported.

Osborne said the new wage rate would rise to £9 an hour in 2020. Increases to the existing minimum wage are set only on a yearly basis.

The official also said the government's official budget forecasters believed the new wage would have only a fractional effect on jobs.

He said higher tax receipts meant he could implement a "smoother" path to recording a surplus in the government finances, but stressed that he would not back away from tackling the deficit.

"You only have to look at the crisis unfolding in Greece as I speak to realize that if a country is not in control of its borrowing, the borrowing takes control of the country," Osborne said. "Britain still spends too much, borrows too much, and our weak productivity shows we do not train enough or build enough or invest enough."