The National Living Wage is set to rise to £ 9.50 an hour

The National Living Wage is set to rise from £ 8.91 per hour to £ 9.50 in the budget, the BBC was told.

This is a 6.6% increase in the minimum wage for all people aged 23 and over, more than double the current 3.1% increase in the cost of living.

The government has come under pressure to help underpaid employees and younger workers, who are among the hardest hit by the Covid pandemic.

The raise was recommended by the Living Wage Foundation campaign group.

The minimum wage that workers should get depends on their age and whether they are apprentices.

The national minimum wage is the minimum hourly wage to which almost all workers are entitled.

The national living wage is higher than the national minimum wage. Applies to workers aged 23 and over.

Employers often fear that a higher minimum wage will lead to higher unemployment, as they will be forced to lay off workers in order to afford the increases.

But independent experts say there has been little or no evidence of job losses due to rising minimum wage levels.

The move comes as households face an economic squeeze due to rising energy costs and rising consumer prices.

Bank of England chief economist Huw Pill warned that UK inflation could reach or exceed 5% by early next year, leading analysts to predict interest rates could rise as early as the month. next.

Chancellor Rishi Sunak is also eager to start making ends meet after the strain of funding pandemic emergency measures, with impending tax hikes.

Measures to reduce public spending have already begun with the end of the temporary £ 20 a week increase in universal credit payments, introduced at the start of the pandemic and again withdrawn earlier this month.