Jobs under threat from £13 minimum wage

By the Editorial Team · Monday, July 6, 2026

The Confederation of British Industry and British Chambers of Commerce warned that raising the UK minimum wage beyond £13 per hour could threaten jobs and increase inflationary pressures. This caution comes as the Low Pay Commission considers a recommended hike to £13.18 in 2027, with the government set to review the advice amid concerns over business sustainability.

Two of the United Kingdom’s leading business organizations have cautioned that significant increases in the national minimum wage could endanger jobs and exacerbate inflationary pressures. The Confederation of British Industry (CBI) and the British Chambers of Commerce (BCC) warned that pushing the minimum wage past £13 per hour might push many employers beyond a sustainable threshold, potentially disrupting the labor market.

The Low Pay Commission (LPC), an independent body that advises the government on minimum wage rates, indicated in March it was considering recommending an increase of up to 5 percent for 2027. This recommendation includes a central estimate of a new rate of £13.18 per hour, representing an increase around 3.7 percent above current inflation levels.

Kate Shoesmith, deputy chief executive of the British Chambers of Commerce, emphasized the risks associated with raises exceeding inflation. She noted that further above-inflation increases to the national living wage could push more firms toward financial strain. A recent BCC survey found that last year’s 4.1 percent raise to £12.71 resulted in approximately 10 percent of businesses responding by reducing their workforce through redundancies.

Matthew Percival, director at the Confederation of British Industry, highlighted the broader economic context compounding the challenges facing employers. He pointed to rising employment costs outpacing productivity gains, combined with escalating energy prices and increased taxation, as factors forcing companies to make difficult decisions. According to Percival, these pressures are compelling many businesses to either cut back on hiring, reduce investment, or raise prices to maintain viability.

A spokesperson for the UK government stated that ministers would carefully review the Low Pay Commission’s advice before deciding on the official minimum wage rates for the coming year. The government has maintained its commitment to balancing the goals of supporting low-income workers while ensuring sustainable conditions for employers amid an uncertain economic environment.

This article was reported by synthesizing coverage from multiple independent news outlets to present a balanced, unbiased account. Read about our editorial standards. Spotted an error? Let us know.