Lidl GB raises store workers pay by 2.8%, above inflation rate

LONDON (Reuters) - The UK arm of German discount supermarket Lidl is to give its 28,000 hourly paid workers a pay rise of at least 2.8%, it said on Monday, a figure slightly above the current inflation rate of 2.5%.

The Bank of England is keeping a close eye on wage settlements as it assesses further moves in interest rates after cutting by a quarter-point last week.

The new pay rates come ahead of the UK government's 6.7% hike in the national minimum wage to 12.21 pounds for most adults that will kick in from April.

Lidl GB said entry-level pay will rise to 12.75 pounds ($15.81) an hour nationally, from 12.40 pounds from March, increasing to 13.65 pounds depending on length of service. London pay rates will start at 14 pounds, increasing to 14.35 pounds over time.

The pay increases from Britain's sixth largest grocer will cost it almost 15 million pounds, it said.

Lidl GB's rises follow moves by No. 2 player Sainsbury's and No. 3 Aldi. From March, Sainsbury's will switch to a minimum of 12.45 pounds an hour, while Aldi will pay at least 12.71 pounds.

Britain's jobs market showed further signs of cooling at the start of the year as demand for staff fell by the most since mid-2020, according to a survey published on Monday that suggested the government's payroll tax hike and economic uncertainty were weighing on hiring.

($1 = 0.8065 pounds)

(Reporting by James Davey, editing by Ed Osmond)