The 4.1% rise in the minimum wage scheduled for April 2026 will support wage growth, particularly for workers on lower incomes, but by further raising businesses’ labour costs it will probably exacerbate the recent weakness in employment. That will weigh on inflation, so the rise in the minimum wage won't prevent a big fall in CPI inflation in 2026.
Will the AI bubble continue to inflate? How will US-China tensions shape trade flows? Will a new Fed chair lead to much lower US rates? We’ll be highlighting what we expect to be the key drivers of macro and markets in the coming year in online Drop-In briefings on Wednesday, 10th December. Register here for our World in 2026 Drop-Ins.
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