More than a million low-paid workers will get a pay rise of more than 6 per cent next year as the minimum wage is increased at the budget.
Rachel Reeves, the chancellor, is due to announce an increase that is well above inflation and even higher than predicted last month.
Younger workers will get an even bigger increase as ministers say that 18 to 20-year-olds should eventually be paid the same older workers.
While ministers are expected to herald good news for “working people”, businesses have warned of the impact of a rise that is expected to be announced alongside an increase in the national insurance contributions they must pay on wages.
About 1.6 million people receive the “national living wage” of £11.44