Labour’s plans for the minimum wage could leave to higher mortgage bills for millions. HSBC UK, a leading high street bank, has warned the Monetary Policy Committee of the Bank of England will keep the base interest rate higher.
The MPC has come under pressure to cut the base rate from its current 16 year high of 5.25 per cent. Many analysts predicted a cut would come in June and now August, however HSBC suggests any reduction could now be delayed until November.
HSBC economist Liz Martins wrote in a note to clients: “The upcoming decisions are likely to be ‘finely balanced’. We see wage growth and inflation remaining sticky, particularly if Labour’s plans include another sizeable hike to the National Living Wage in April 2025.”
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In its manifesto, Labour said it would introduce new legislation as part of its ‘new deal for working people’ within its first 100 days in power. The party has promised that this plan to ‘make work pay’ will ban exploitative work conditions and give workers more rights.
Labour has promised to make sure the minimum wage a ‘genuine living wage’ and also said it would remove age bands so that all adults are entitled to the same minimum wage. Labour’s Plan to Make Work Pay commits to banning ‘exploitative’ zero hours contracts, ending fire and rehire by employers and introducing basic rights ‘from day one’ of a new job.
The election manifesto says: “Greater in-work security, better pay, and more autonomy in the workplace improve the lives of working people and bring substantial economic benefits. Britain’s outdated employment laws are not fit for the modern economy, and recent Conservative legislation has fuelled hostility and confrontation leading to the worst period in industrial relations since the 1980s.
“For too many people a job does not offer the route out of poverty it should: either because work is insecure, inflexible, or low paid; or because people face barriers when trying to move into a better job. Responsible businesses face being undercut when rights are not enforced properly.
“Labour will stop the chaos and turn the page to create a partnership between business and trade unions.”
