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Chancellor Philip Hammond is set to increase UK minimum wage to £9.61 per hour

The move will make Britain's the world's highest paying minimum wage payer

Sources speaking to the Observer have claimed that Philip Hammond could make the UK’s minimum wage rate the highest in the world, raising it to £9.61 per hour. At current rates, it is not expected to pass £9.50 until at least 2024.

Under the Chancellor’s plans the rate would be increased to 66 per cent of median earnings – an international definition of ‘low pay’.

Labour market expert Mark Graham said: ‘The UK is planning to implement the world’s highest minimum wage. This is good news.

‘But we need to ensure that low-wage workers are not misclassified and pushed into the gig economy – where they lack any equivalent minimum wage protections.’

The UK’s minimum wage is currently the fourth-highest in the EU behind Ireland, France and Luxembourg, rising to £8.21 last month in an increase which the Government said would be worth an extra £690 per year.

A spokesman for the Confederation of British Industry said: ‘Wages should rise at the fastest rate sustainable without hurting the job prospects of the people it’s there to help – that’s the balancing act for the low pay commission.

‘Ultimately wage growth has to be underpinned by rising productivity, so investment in skills, infrastructure and innovation is critical.’

The National Minimum Wage for younger people was also increased, to £7.70 per hour for 21 to 24-year-olds and £6.15 per hour for 18 to 20-year-olds.

However, a study by the TUC has suggested that young workers are missing out because of the lower rates for their age group.

The average 21 to 24-year-old minimum wage worker is earning remarkably less for the same work at £800 a year less than over-25s, the research indicated.

The TUC called for all over-21s to be paid the full minimum wage rate and for it to be raised to £10 an hour as soon as possible.

The Labour party has said it would increase the minimum wage to 10 pounds per hour if it won a general election.

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