Cost of living – latest updates: UK now set for 6.25% interest rate this year, economists forecast; ‘take meter reading’ warning ahead of price cap change

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Germany is set to raise its minimum wage by 3.4% to €12.41 (£10.68) an hour from 2024, according to the proposals of a government appointed commission.

Raising the minimum wage, which increased to €12 per hour in October from €10.45, was one of the key election promises of Chancellor Olaf Scholz and his Social Democrats.

A hike would be likely to directly affect almost six million employees in Germany.

The country has the second-highest minimum wage in the European Union behind Luxemburg, which mandates a monthly minimum of €2,387. 

If the proposed increase in Germany is approved, the eurozone’s largest economy would see workers earn at least €2,054 a month.

Only six EU countries have a national minimum wage above €1,500 per month, including Luxembourg, Germany, Belgium, the Netherlands, Ireland and France, Eurostat data shows.

But Carsten Brzeski, global head of macro at ING, has said the increase now proposed is “very moderate and is too little” to make up for the increased cost of living.

The proposal still needs to be approved by Germany’s Labour minister Hubertus Heil.

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