Minimum Wage Set to Increase Amid Rising Shop Price Inflation

Source reports published 27 Oct 2026, 6:13 am – 10:00 am AEST

The UK’s minimum wage is set to increase to £13.18, driven by inflation and rising energy costs. Retailers are struggling to limit price increases due to elevated Brent crude oil and gas prices, putting pressure on the government.

What happened

• The Institute of Directors (IoD) spokesperson, Alex Hall-Chen, stated that combined with a 40% increase in the National Living Wage since 2021, the employment cost crisis is burdening British businesses, leading to hiring freezes and automation.
• Deutsche Bank predicts a 4.6% increase by April, while Morgan Stanley forecasts a potential 5.5% rise by spring.
• Labour backbencher Chris Webb called for a focus on young unemployment, urging the government to provide support for young people to enter the workforce.
• The Bank of England is expected to raise interest rates, potentially further impacting retail prices.
• Retailers are increasingly passing on rising costs, with shop price inflation reaching 2.1% year-on-year in October, driven by increases in Brent crude and gas prices.
• Professor Ruth Patrick’s research highlights the impact on low-income families, particularly regarding transportation costs and energy bills, with 73% of participants shopping in reduced-items aisles and 62% changing their food purchases.
• The report emphasizes the need for sustained government support, including restoring the value of child benefit, to address the scale of the problem.

Original reporting

• GB News: John Healey set to announce inflation-busting minimum wage hike
  2026-10-26T20:13:53+00:00
• Guardian: UK shop price inflation ‘highest since 2024’ as retailers struggle to limit price rises
  2026-10-27T00:00:00+00:00