LONDON (Reuters) -Britain's Costa Coffee said on Thursday it would give over 15,000 hourly-paid workers an average 9% pay increase from April 1, a move that reflects the rise in the government mandated minimum wage.
The coffee and sandwich chain, a unit of Coca-Cola (NYSE:KO) Co, said its starting rate would rise from 10.70 pounds ($13.42) an hour to 12 pounds an hour - ahead of the government's national living wage, which will increase by 9.8% to 11.44 pounds an hour from April.
Costa's rise will be noted by the Bank of England, which is keeping a close eye on pay settlements as it assesses the direction of interest rates. It fears rapid wage growth could add more inflationary pressure across the economy.
Worker wages in Britain have only recently begun outpacing inflation, which held steady at 4% in January, still double the central bank's target of 2%.
Costa, which trades from 1,500 company owned stores, said more experienced baristas would see their pay increase to at least 12.33 pounds an hour, while staff in central London will receive an extra 1 pound an hour. Targeted bonuses are also offered.
In January, Sainsbury's, Britain's second largest supermarket group, announced a 9.1% rise in workers pay.
Discounters Aldi and Lidl, and Amazon (NASDAQ:AMZN) have also announced pay rises for 2024.
($1 = 0.7971 pounds)