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National living wage 'will hike cost of groceries'

By Damian Clarkson

Shoppers can expect to pay more for their groceries as a result of the National Living Wage, it has been claimed.

All employers will be required to pay staff at least £7.20 an hour from next April, rising to £9 an hour by 2020.

Hargreaves Lansdown senior analyst Laith Khalaf said all supermarkets will face increased staff costs as a result.

"Seeing as they are all in it together, they will probably pass the costs on, which would mean an end to plunging prices across the food aisles," he said.

It comes a day after Whitbread, the owner of Costa Coffee and Premier Inn, warned it could push up prices as a result of the new wage policy.

And given that many companies currently pay some of their staff less than this, Mr Khalaf suggested firms across the board will follow suit and hike prices.

"Paying more for cappuccinos and onion rings could be the thin end of the wedge when it comes to the Living Wage pushing prices up, because Whitbread won't be the only company facing these issues," he said.

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