A minimum wage rise will be confirmed in this Thursday’s Autumn Statement - with reports suggesting it will go up by 90p an hour.
It’s understood Chancellor Jeremy Hunt ’s announcement is due to confirm how much wages will rise in April 2023.
And The Times reports he will accept a recommendation by the Low Pay Commission to raise by minimum wage by nearly 10%.
Such a rise could push the national living wage - the minimum wage for over-23s - from £9.50 an hour to about £10.40 an hour.
The minimum wage is currently £9.50 an hour for over-23s, £9.18 for those aged 21-22, £6.83 for those aged 18-20 and £4.81 for those under 18.
It would help around 2million workers cope with soaring bills after inflation rose to 10.1%.
But it would come at the same time as the £2,500 cap on average energy bills ends - and as Jeremy Hunt finds £55bn in tax rises and spending cuts.
Brits are set to suffer a council tax rise and tens of billions of pounds in stealth tax hikes, through thresholds being frozen for as much as six years.
It’s understood the Chancellor is drawing up plans for a new round of cost-of-living payments.
That would hand another £650 to people on Universal Credit, £300 to pensioner households and £150 to people on disability benefits.
Yet average bills could soar by £600 a year from April - and stand at nearly £2,000 more than they were in mid-2021.
Meanwhile, new figures today show Brits have already suffered a 2.7% real-terms pay cut in the last year as inflation rockets.
It was slightly smaller than the real-terms fall earlier this year, but is “among the largest” falls since records began in 2001.
The Office for National Statistics said pay grew by 6.6% in cash terms in the private sector - but just 2.2% in the public sector.
That is the largest gap ever recorded outside the height of Covid - and comes as a wave of public sector workers prepare to strike.
Louise Murphy, Economist at the Resolution Foundation, warned: “This wedge is unsustainable in the long run.
“It creates huge difficulties for recruiting and retaining public sector.
“With public services already stretched and job vacancies already at record highs, it will be hard for the Chancellor to deliver a further period of sustained public sector pay restraint.”
Chancellor Jeremy Hunt said of today’s wage figures: “I appreciate that people’s hard-earned money isn’t going as far as it should.
“Putin’s illegal war has driven up inflation - a hidden and insidious tax that is eating into paychecks and savings.
“Tackling inflation is my absolute priority and that guides the difficult decisions on tax and spending we will make on Thursday.
“Restoring stability and getting debt falling is our only option to reduce inflation and limit interest rate rises.”
But Lib Dem Treasury spokesperson Sarah Olney said: "This Government's economic mismanagement is leaving pay packets stretched further than ever before just as bills spiral out of control.”
Shadow Chancellor Rachel Reeves added: "Today's figures press home the knock-on impact of 12 years of Tory economic mistakes and low growth.
"Real wages have fallen again, thousands of over 50s have left the labour market and a record number of people are out of work because they’re stuck on NHS waiting lists or they’re not getting proper employment support.”
The Treasury refused to comment on Budget speculation.
