Resolution Foundation forecasts ‘lower rise’ in NLW

The Resolution Foundation has predicted a weak pay growth following the UK’s vote to leave the EU which could rescued the increase to the National Living Wage (NLW) by 10p.

The NLW, which was introduced in April, currently stands at £7.20 per hour for workers aged 25 and over.

The think tank now expects the NLW to rise to £7.50 per hour in 2017.

In an interview with the BBC, Stephen Clarke, policy analyst at Resolution Foundation, said: "The National Living Wage relates to average earnings and because of Brexit, many forecasters, including the Bank of England, revised down their earnings growth; therefore the National Living Wage has also been revised down."

The rate, which is liked to the growth in the pay of typical workers, is expected to reach £8.60 by 2020.

In a report, the Resolution Foundation maintained that although the NLW is lower than expected, it is still set to transform the country's low-pay, helping some 800,000 workers out of low pay by 2020.