Costa Coffee Boosts Wages Amid Inflation Dynamics

Costa Coffee announced a 5% pay raise for over 15,000 hourly workers, surpassing the UK's inflation rate and preceding the government's minimum wage hike. This move reflects ongoing labor market trends and economic strategies, potentially influencing the Bank of England's future interest rate decisions amid broader economic uncertainties.

In a striking move, Costa Coffee has announced it will increase pay for more than 15,000 hourly-paid workers by 5% starting April 1, surpassing the UK's current inflation rate of 2.5%. This decision follows a notable escalation in the government's national minimum wage, which has drawn attention from economic observers.

The popular coffee chain, a subsidiary of Coca-Cola Co, revealed on Tuesday that its starting pay would rise to 12.60 pounds per hour from 12 pounds. These changes precede an impending 6.7% government-mandated increase in the national minimum wage for most adults, slated for April implementation.

Official data shows British pay growth accelerated in late 2024, suggesting a resilient jobs market amid challenging economic conditions. In response, Costa Coffee will raise pay for its experienced baristas and additional incentives for London-based staff, aligning with similar moves from Sainsbury's and Lidl GB.

(With inputs from agencies.)