NLW increases will fall short of targets, says think tank

A think tank has said that the National Living Wage (NLW) will rise at a slower rate than the Government has predicted – causing the UK to miss its 2020 minimum wage targets.

The comments come from the Resolution Foundation, which says that Britain’s eventual exit from the European Union will hit planned increases to the NLW year-on-year.

Resolution forecasts that by April next year, the NLW for workers aged over 25 will rise to just £7.50 per hour, as opposed to the £7.60 proposed by the Government.

The think tank added that a Government target for the NLW to hit £9 per hour by 2020 was unlikely to come to fruition.

Conor D’Arcy, policy analyst at the Resolution Foundation, said: “While there is much uncertainty over Britain’s long-term economic outlook, most economists agree that wage growth in the next few years is likely to be weaker than expected prior to the Referendum.

“That means we’re unlikely to see the £9 National Living Wage that George Osborne talked about in this parliament,” he said.

Mr D’Arcy’s concerns contradict comments made by shadow chancellor John McDonnell last month, who suggested that under a Labour Government the NLW would be increased to ‘at least £10’.